Growth Notes

U.S. opens USMCA review as trade tensions escalate

By Sofea Mansor
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U.S. opens USMCA review as trade tensions escalate - usmca review
The Federal Register notice on Monday triggered the mandatory USMCA annual review process after the U.S. declined renewal.

The U.S. Trade Representative’s office launched the public comment phase for the upcoming USMCA joint review after the U.S. chose not to renew the trade pact this year. This action initiates the first step of the mandatory annual review process, as detailed in a Federal Register notice published on Monday.

Stakeholders can submit feedback on three main topics: how well the agreement has been implemented, whether both Mexico and Canada are following its rules, and its overall economic effect on North America. All comments must be filed by January 12, 2027, though a public hearing has been scheduled without a set date.

Canada and the U.S. continue their trade dispute, with Washington imposing a 50% tariff on $20 billion in Canadian goods in August. Canada retaliated in September, leading the U.S. to expand tariffs and block imports of alcohol, dairy products, and motor vehicles. Meanwhile, Mexico has taken a more collaborative approach, holding its third round of bilateral talks with the U.S. in late July. During the G20 Trade Ministerial in Milwaukee last week, Mexico’s Economy Secretary, Marcelo Ebrard, met with U.S. Trade Representative Jamieson Greer. Ebrard said Mexico and the U.S.

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Because the three countries failed to extend the USMCA this year, they must now conduct annual reviews until either a new deal is finalized or the current agreement expires in 2036. The next review is due by July 1, 2027.

How the U.S. proceeds will depend on whether tensions with Canada worsen or ease. If the tariff conflict continues, the U.S. could demand stricter enforcement in future negotiations. Mexico’s willingness to engage may also determine how quickly all parties can find common ground. The review process itself provides a framework, but resolving outstanding issues will require cooperation from all sides.

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