Could the USMCA cease to exist as we know it? The Future of North American Trilateral Relationships

The United States-Mexico-Canada agreement (“USMCA”) is a trade deal between the three countries in North America, which came into effect in July 2020, replacing the North American Free Trade Agreement (“NAFTA”). The USMCA agreement aims to promote free trade, labor rights, environmental protection, and digital trade among the parties. This trade relationship is approaching a pivotal moment, as it is scheduled for its mandatory joint review in July 2026. The U.S. is holding a public hearing on November 17, a consultation process required by U.S. law. Tensions are high as the U.S. considers restructuring the current trilateral agreement. What was supposed to be a routine check-in has now been compromised, as questions have been raised regarding whether the trilateral agreement will survive in its current form, if at all.

United States Trade Representative Jamieson Greer, while he did not go into specific violations, accused Mexico of failing to comply with the USMCA, arguing that it “doesn’t make a lot of sense to talk about extending the USMCA or updating it when Mexico is not even complying with important parts of it.” This series of statements follows President Trump’s remarks earlier this year, claiming that Mexico and Canada have made great deals and have taken advantage of the United States in manufacturing. President Trump has openly suggested he could either renegotiate USMCA or pursue separate bilateral deals with each country, noting that the agreement allows for “different deals.” Meanwhile, Mexico’s Economy Minister, Marcelo Ebrard, acknowledged the inevitable scenario that the 2026 review includes several bilateral negotiations, as there are different bilateral trade relationships within the framework of the trilateral USMCA pact. “There are many bilateral issues on our part, not just with the United States but with Canada as well,” he said.

Mexico’s President Claudia Sheinbaum confirmed in a press conference that she and President Trump spoke on October 26, when they agreed to continue working through several trade issues, maintaining a very diplomatic stance. Sheinbaum also stressed that the USMCA is a binding law in all three countries, and recognized that although the trilateral framework currently predominates, there could be meetings regarding bilateral deals during this review process because “there are important matters between Mexico and the United States, between the United States and Canada, and between Canada and Mexico,” she said. “Not everything has to be discussed by all three parties together.”

On the northern side of the border, Canada finds itself in a relatively more difficult position. As opposed to Mexico, Canada’s position appears to be a more defensive approach. President Trump recently ended trade negotiations with Canada due to frustration with the negotiation progress and an anti-tariff ad campaign launched by the Ontario province. Despite these setbacks, including the U.S. announcement of 35% tariffs on exports not covered under the USMCA, Canada’s Prime Minister Carney has reaffirmed its commitment to the agreement. Carney has also indicated that bilateral deals will exist alongside what is covered in USMCA, making a big difference in the forestry and automotive sectors.

So what happens next? Suppose the three countries cannot agree to extend the USMCA agreement during the 2026 review. In that case, the deal will enter a decade-long expiration period with annual reviews until it terminates in 2036. This kind of uncertainty would be devastating for companies that have built cross-border supply chains based on the assumption of tariff-free trade.

The November hearing represents a critical opportunity for businesses and stakeholders to make their voices heard before formal negotiations begin. The outcome of this review, with either a reinforced trilateral framework or several bilateral arrangements, will determine the trajectory of North America’s economic landscape for years to come.

Article Written by Alejandro Kreimerman Meyohas

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