US, Mexico and Canada face fraught USMCA review this summer
Updated
Updated · Council on Foreign Relations · May 1
US, Mexico and Canada face fraught USMCA review this summer
10 articles · Updated · Council on Foreign Relations · May 1
The 2026 review could extend the pact to 2042, but no consensus is expected by 1 July amid worsening US-Canada tensions and bilateral positioning by Ottawa and Mexico City.
If renewal stalls, USMCA would likely stay in force initially, but annual reviews could follow, increasing uncertainty for companies planning investment and trade across North America.
The review follows US tariffs on Canadian and Mexican goods, partial rollbacks after a Supreme Court ruling on IEEPA, and concerns Washington may use the process to press both neighbours on China.
Will the USMCA review unite North America against China or splinter the continent over competing national interests?
Is North America's celebrated 'nearshoring' boom about to face its first major bust from trade uncertainty?
Navigating the 2026 USMCA Review: Geopolitical Rivalry, Sectoral Battles, and the Threat of Regional Fragmentation
Overview
In 2026, North America's USMCA review faces deep tensions as Mexico strengthens agricultural leadership and imposes tariffs on Chinese imports to align with U.S. pressure, risking its role as a manufacturing hub. Canada adopts a defensive stance, acknowledging unavoidable U.S. tariffs while boosting defense spending and resisting trade concessions. The U.S. demands stricter rules to curb Chinese influence, imposing steep tariffs and pushing labor reforms. These conflicting priorities overshadow the July review launch, complicating negotiations. Key sectors like automotive, agriculture, and digital trade face disruption amid rising compliance costs. Without compromise, the region risks prolonged stalemate or fragmentation, threatening North American economic integration and competitiveness.