Back to today’s briefing

Story perspectives

US Rejects USMCA Renewal Over $197 B Mexico Deficit

7/1/2026

43 8 Full Breakdown

Summary

Story summary

The United States will not renew the United States-Mexico-Canada Agreement in its current form, citing a $197 billion goods trade deficit with Mexico.
Canada’s trade minister Dominic LeBlanc and Mexico’s economy secretary Marcelo Ebrard urged a 16-year extension, but the United States declined.
The move creates uncertainty for North American businesses, especially automakers that account for about 18 % of trade with Canada and Mexico.

History

Historical Context

NAFTA began Jan 1 1994, opening a tariff-free market for the United States, Canada and Mexico. After the 2017 renegotiation, the USMCA—dubbed “New NAFTA”—was signed Oct 1 2018, ratified in March 2020 and entered force July 1 2020, covering a bloc of more than 510 million people. A mandatory 2026 review saw Canada request renewal on June 1 2026, but the United States announced on July 1 2026 it would not extend the pact.

1 of 2

Story summary

The United States will not renew the United States-Mexico-Canada Agreement in its current form, citing a $197 billion goods trade deficit with Mexico.
Canada’s trade minister Dominic LeBlanc and Mexico’s economy secretary Marcelo Ebrard urged a 16-year extension, but the United States declined.
The move creates uncertainty for North American businesses, especially automakers that account for about 18 % of trade with Canada and Mexico.

1 / 2