The three parties to the United States – Mexico – Canada Agreement (USMCA) are beginning domestic consultations ahead of the scheduled 2026 joint review, which could lead to changes in the agreement. Under a novel provision in USMCA Article 34, the 2026 review also starts a 10-year clock for expiration of the free trade agreement. To prevent expiration in 2036, the parties must submit notifications at or after the 2026 review approving the renewal of the USMCA for another 16-year term. For the United States, the Trump administration will likely withhold US renewal approval to compel a partial renegotiation of certain commitments through the joint review. The full scope of the US plan has not yet been developed, but initiatives under discussion in Washington include modifications to the automotive industry rules of origin, strengthened forced labor import prohibitions, new restrictions on Chinese companies in North America, and resolutions to ongoing USMCA implementation disputes.
USMCA’s 2026 joint review and 16-year term extension
The Article 34 requirements
Article 34.7 of the USMCA1 requires the parties to hold a “joint review” of the agreement six years after its entry into force, which is July 1, 2026.2 In the review, the parties may submit recommendations for revisions to the agreement, which the group would consider. Article 34.7 also establishes that the agreement expires in 2036 unless the parties confirm in writing that they wish to extend it for another 16 years. The six-year review in 2026 is the first opportunity for the parties to notify that they approve or oppose renewal of the agreement in 2036. A notification that a party opposes the 2036 renewal would trigger further review meetings until the negotiators address the dissenting party’s concerns or the USMCA expires.
The exact procedure for conducting the review remains undecided and there is no precedent to follow. The USMCA’s text describes the review only in broad terms. If the parties decide to make amendments to the text of the agreement, Article 34.3 provides that the “amendment shall enter into force 60 days after the date on which the last Party has provided written notice to the other Parties of the approval of the amendment in accordance with its applicable legal procedures […].”
Strategy considerations for the review
The United States would likely be the primary force behind any changes to the USMCA during the review, because the United States was the party that originally proposed the review system. Officials from the first Trump administration (which negotiated the USMCA) saw the review system as an action-forcing event the United States could leverage to obtain desired updates to the agreement. In recent remarks about his trade policy agenda, President-elect Donald Trump stated that “upon taking office, I will formally notify Mexico and Canada of my intention to invoke the six-year renegotiation provision of the USMCA that I put in.”3 Canada and Mexico, meanwhile, may adopt more defensive strategies, seeking to preserve market access and reassure investors.
A key question for negotiators would be how far they want to push the review and renegotiation, as investor confidence depends on the parties maintaining a credible commitment to renewing the agreement by 2036. While negotiators could win some improvements to the agreement, a prolonged dispute could generate concerns among investors about the possibility of renewal failure. Additionally, an extended renegotiation process could result in different political parties taking power by the time the negotiation concludes, potentially motivating the current leadership to seek a swift resolution.
The United States’ review process and objectives
The United States’ preparations
The United States will conduct an internal policy review in 2025, the year preceding the USMCA review, to help formulate and articulate its position. According to the United States’ USMCA implementing law,4 the United States Trade Representative (USTR) is required to initiate public consultations on the review at least 270 days before the review, which would be around October 2025. USTR would publish a Federal Register notice to invite public comments and hold public hearings, providing opportunities for businesses and other stakeholders to make their voices heard. Subsequently, at least 180 days before the review (in or around January 2026), USTR must report to Congress outlining its plans. The report to Congress would describe the actions the Trump administration would recommend for the USMCA and a decision on whether the Trump administration would confirm at the 2026 review that the United States wishes to extend the USMCA past 2036.
Potential US interests
Though the United States has not issued a policy agenda for the negotiations, some general themes have emerged in Washington that the Trump administration may be interested in taking up:
- Expanding the USMCA with new or updated provisions to address issues that have become higher priorities since the signing of the agreement. Potential focus areas could include new cooperation mechanisms for supply chain disruptions, expanded anti-forced labor import provisions, new measures to jointly block Chinese companies from the North American market, measures to promote critical minerals development and investment protection, incentives for near-shoring, new border management practices, specialized rules of origin for electric vehicles, expanded provisions on digital services (including new areas of digital regulation like artificial intelligence), and an accession mechanism for other countries in Latin America.
- Re-opening existing sections of the agreement to settle (or re-litigate) ongoing disputes over the USMCA’s implementation, including specific dispute settlement cases. For example, following the adverse ruling in the automotive rules of origin case for the United States, former USTR Robert Lighthizer argued the United States should renegotiate the automotive text. Indicating bipartisan support for such an action, Vice President Kamala Harris also endorsed changing the automotive rules of origin. US industry groups are pressuring the government to revive other disputes, including the US-Canada dairy market access dispute. Newly emerging disputes like those over Mexico’s recent judicial and regulatory agency reforms and Canada’s new digital services tax (DST) may also be swept into the negotiations.
Mexico begins industry consultations and initial contacts
President Claudia Sheinbaum, who took office on October 1, 2024, has placed the defense and improvement of the USMCA at the top of her foreign trade agenda. During the 14th US-Mexico CEO Dialogue in Mexico City on October 14-15, 2024, the new Secretary of Economy, Marcelo Ebrard Casaubón, said the meeting marked “the starting gun for the promotion, defense, and discussion of the [USMCA].”5 On October 17, 2024, the new Undersecretary of Foreign Trade of the Secretariat of Economy, Luis Rosendo Gutiérrez, who has met in October with Cara Morrow (USTR Senior Advisor) to talk about the USMCA review, shared that the Mexican government will soon begin consultations with Canada on the USMCA review process. Mexico does not plan to start formal bilateral talks with the United States until January 2025, once President-elect Trump takes office.
Undersecretary Gutiérrez explained that Mexico is preparing to conduct a comprehensive review of the agreement but is ruling out backing a complete renegotiation. “It is a review because it has very good terms, and we have spoken with the United States and Canada to review this [agreement] in the best way for the three countries,” he said. Undersecretary Gutiérrez noted that the government is considering how to approach an industrial policy, which would give priority to the semiconductor, electric vehicles, battery, rare earths, electronics, medical equipment, and textile industries. The Mexican government considers that there is an opportunity to further integrate value chains in North America, as Canada and the United States are interested in strengthening the rules of origin and having an increasingly larger regional component in goods produced by the three countries. The Mexican government has expressed that it is open to improving the Rapid Response Mechanism (RRM) under the USMCA labor chapter to make it more expeditious, a position supported by labor activists in the United States.
In the meantime, the Mexican government will seek to form coalitions with US and Canadian importers of Mexican products who are interested in maintaining USMCA benefits for the three countries. The Mexican Secretariat of Economy has set up a consultation mechanism (a “side room”) with private sector stakeholders. The mechanism consists of regular meetings of working groups on specific topics with the participation of government officials and representatives of the Mexican Business Coordination Council (Consejo Coordinador Empresarial, CCE). These meetings aim to prepare Mexico’s position on sensitive trade issues, including the energy, automotive, and agricultural sectors.
Canada holds initial hearings and public consultations
Canada is scheduled to hold federal elections on or before October 20, 2025, which may lead to a change in the ruling party. Canada’s specific policy agenda for the USMCA negotiations may not be fully clarified until after the new government is seated (though all leading parties support maintaining the USMCA), but initial consultations have already begun.
In August 2024, Canada issued a consultation notice asking for public input on “elements of the agreement that are working well and those that can be further improved.”6 The House of Commons’ Standing Committee on International Trade also held a series of hearings in May and June 2024 to study the upcoming review.7 Minister of Export Promotion, International Trade, and Economic Development Mary Ng testified to the importance of preserving the USMCA at the hearings, saying the industry feedback she has received shows that Canada’s leaders “must do everything we can to preserve, to strengthen and to deepen [the USMCA].” Members of Parliament raised various interests in the hearings, including the importance of protecting Canada’s dairy supply management system. Some Members of Parliament have also advocated for increasing trade barriers on Chinese imports alongside the United States, which the Canadian government has recently begun doing unilaterally.8 Suggesting Canada could be interested in coordinating those China-related trade policy measures across all three USMCA members, Deputy Prime Minister Chrystia Freeland recently said she sympathizes US concerns that “Mexico is not acting the way that Canada and the US are when it comes to its economic relationship with China.”9
1 USMCA Article 34.7.
2 The Article 34.7 review and extension system is separate from the standard treaty provisions granting a right to any party to withdraw with six months’ notice, which is in Article 34.6.
3 “Former President Trump Delivers Remarks at Detroit Economic Club,” CSPAN, October 10, 2024.
4 19 U.S.C. § 4611.
5 The United States - Mexico CEO Dialogue was established in 2013 by the CCE and the US Chamber of Commerce and is the principal mechanism for high-level interactions between the private sector and officials from both Mexico and the United States.
6 “Public consultations on Canada-United States-Mexico Agreement commence,” Global Affairs Canada, August 21, 2024.
7 2026 CUSMA Review, 44th Parliament, 1st Session (November 22, 2021 - Present).
8 See White & Case’s previous coverage of Canada’s new trade restrictions at “Canada to Raise Tariffs and Limit Subsidies for Clean Vehicles, Steel, and Aluminum from China.”
9 “Freeland 'sympathetic' to U.S. trade concerns about Mexico,” CBC, November 13, 2024.
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