By David Lawder
WASHINGTON, July 1 (Reuters) – The Trump administration declined on Wednesday to extend the U.S. trade agreement with Mexico and Canada, starting a decade-long clock to wind down the North American trade deal as it seeks changes to try to reshore manufacturing jobs.
The decision, revealed after a six-year review of the U.S.-Mexico-Canada Agreement, keeps the agreement in place for another 10 years with annual reviews before it expires, unless the three countries agree to renew it with changes.
“The United States did not agree to renew the USMCA in its current form,” U.S. Trade Representative Jamieson Greer said in a statement. “As a result, the USMCA is not renewed. The United States will continue to engage with Mexico and Canada to address the agreement’s shortcomings and our trade deficits with these countries.”
Greer said the U.S. will proceed with a USMCA bilateral negotiating round scheduled with Mexico during the week of July 20. A senior administration official said that the talks in Mexico City would focus on strengthening North American rules of origin for autos and other industrial goods and economic security to keep other countries from benefiting from USMCA access.
Dominic LeBlanc, the Canadian minister responsible for U.S.-Canada trade, said in a statement that USMCA remains “fully in force” until 2036 and can be renewed at any time for another 16-year period.
LeBlanc, who participated in a virtual meeting with Greer and Mexican Economy Minister Marcelo Ebrard, added that Canada would continue to work to address President Donald Trump’s tariffs on Canadian steel, aluminum, autos and lumber.
“We agreed on the importance of continuing our discussions and identifying ways to ensure trade and investment frameworks between Canada, the United States and Mexico continue to support North American prosperity and competitiveness.”
The U.S. decision was widely expected, as Greer said that more time was needed to address problems with USMCA, including persistent and growing U.S. trade deficits with Canada and Mexico.
Mexican President Claudia Sheinbaum said on Wednesday before the U.S. decision was announced that an extension could happen any time that the three countries reach agreement over the next decade.
“Today is not a deadline,” Sheinbaum said in her daily press conference in Mexico City. “If in five months or three years the parties say, ‘We can extend it for another 16 years,’ it can be extended.”
“The joint work continues — it’s not as if everything ends today,” she added.
Trump, who has imposed tariffs of 25% on Mexican and Canadian autos, 50% on metals, and 10% on lumber, has repeatedly said he does not want to extend USMCA, which he launched in 2020 as “the best agreement we’ve ever made.”
In two rounds of negotiations with Mexico, Trump’s administration has demanded that North American-built vehicles contain 50% U.S. content, pushing the regional total to 82%.
(Reporting by David Lawder; Additional reporting by Kalea Hall in Detroit, Promit Mukherjee in Ottawa and Ana Isabel Martinez in Mexico City; Editing by Andrea Ricci )
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