U.S. to Skip USMCA Renewal July 1, Triggering Rolling Reviews

What happens to USMCA on July 1?

The U.S. will not renew the USMCA trade agreement by the July 1 deadline, triggering rolling annual reviews instead of a 16-year extension, according to officials close to the negotiations. The pact remains in force through at least 2036 unless one country withdraws, but the decision opens an indefinite period of bilateral talks over auto manufacturing rules, steel tariffs, and other trade irritants that directly affect cross-border equipment supply chains.

The agreement governs nearly $2 trillion in annual trade between the U.S., Mexico, and Canada. USMCA-compliant goods have largely been exempt from the Trump administration's tariff barrage, but autos and steel have already faced new duties that strain ties and disrupt parts flows. By declining to formally renew, the White House preserves leverage to extract concessions through side deals without altering the legal text of the pact, which would require a congressional vote.

What the White House wants on auto content

U.S. Trade Representative Jamieson Greer told France 24 that on July 1, "I don't think we're going to renew it outright, but we'll engage in the separate negotiations." One of the administration's goals is a new standard requiring at least 50% U.S. content in new vehicles to qualify for tariff-free treatment, a condition Trump unsuccessfully sought during the first-term renegotiation. Greer has signaled the administration wants changes without going to Congress, preferring to squeeze Canada and Mexico for concessions spelled out in side letters or protocols.

Canada's chief trade negotiator, Janice Charette, described the approach as focused on a "kind of snap-on Lego bilateral piece" added to the original deal. The U.S. and Mexico have already scheduled their third round of talks for mid-July, while the U.S. has had less formal discussions with Canada. Dominic LeBlanc, the Canadian minister responsible for U.S. trade, met with Greer this week in Washington and afterward suggested July 1 shouldn't be seen as a crucial date. "I think we've got to be careful not to set up a cliff that doesn't exist," he said.

How tariff uncertainty hits equipment supply

Canada and Mexico are two of the largest U.S. trading partners and the top buyers of its goods, but both have faced new tariffs on products such as autos and steel. Senior officials in Canadian Prime Minister Mark Carney's government are pushing to get an agreement to address the steep tariffs Trump imposed on steel, aluminum, autos, and lumber. Canadian officials are bracing for a scenario in which tariff negotiations drag on for years, perhaps through the end of Trump's term in 2029.

Mexico's economy has seen 19 straight months of negative total investment, driven in part by uncertainty over tariffs. Talks with Mexico have focused heavily on the auto sector. When asked for comment, the Mexican government referred to a letter released by Economy Minister Marcelo Ebrard stating the priority for USMCA should be keeping it as a three-way agreement.

What side deals could cover

Against the backdrop of the review, the U.S. has started separate bilateral talks with Canada and Mexico over trade irritants. Some of those issues are only loosely related to the USMCA. Side deals may be struck to address them without changes to the pact's underlying text. Familiar irritants have popped up again, such as Canada's dairy management system that restricts imports. Defense programs are also a source of tension, such as whether Canada will follow through on an order of F-35 fighter jets.

Carney used an event in New York to publicly pitch the U.S. on closer cooperation on critical minerals such as potash and uranium. Trump is also keen on a modified version of the Keystone XL oil pipeline from Canada. This week, Carney's government backed off a plan to force major streaming companies such as Netflix and Walt Disney to spend 15% of their annual Canadian revenue on local content. The U.S. ambassador in Ottawa praised that decision.

What fleets face if talks drag out

It's an open question whether Trump would agree to renew the agreement at all, or whether his administration will simply elect to keep it in constant reviews, which would make it harder for Canada and Mexico to win investment. If the White House doesn't commit to renewal, Canada or Mexico may balk at making concessions. As talks intensify, Canadian officials believe the president may do more of what he's done since January 2025, hitting Canada with new tariffs or denouncing its government in social media posts, and may even threaten to pull the U.S. out of the trade deal to add pressure and force concessions.

Trump can give six months' notice to quit the deal altogether, something he's privately flirted with but not publicly threatened of late. Instead, the talks with Mexico and Canada appear headed toward side deals with each country, similar to the agreements Trump has struck with other nations to trade tariff relief for certain concessions. After his meeting with Greer, LeBlanc sounded an optimistic tone but warned of "turbulence" ahead.

What this means for cross-border equipment flows

For fleets running cross-border, the decision to skip renewal means prolonged uncertainty over tariff treatment for trucks, trailers, parts, and components sourced from Canada and Mexico. USMCA-compliant equipment has largely avoided Trump's tariff barrage, but the annual review cycle gives the White House recurring leverage to impose new duties or demand concessions. Steel and aluminum tariffs have already hit trailer manufacturers and body builders. Auto content rules, if tightened to 50% U.S. sourcing, would ripple through Class 8 tractor supply chains that rely on Mexican engine plants and Canadian axle and transmission facilities.

Fleets should track bilateral side deals as they emerge. A steel tariff resolution with Canada could stabilize trailer pricing. A Mexico auto-sector agreement could clarify duty treatment for Daimler, Volvo, and Paccar units built in Saltillo and Ramos Arizpe. Until those deals land, cross-border equipment procurement carries tariff risk that wasn't priced in when the USMCA was signed.