The pact that has knit together North American manufacturing for a generation just entered an uncertain new phase.

What happened at the joint review

Under the terms of the United States-Mexico-Canada Agreement, the three countries were required to hold a joint review of the deal by July 1, 2026 — the first since it took effect in 2020. They met virtually, and Washington declined to sign on to a long-term extension.

"The United States did not agree to renew the USMCA in its current form," U.S. Trade Representative Jamieson Greer said in a statement, adding that a "rubberstamp of the Agreement is not in the national interest." He said the U.S. would keep engaging with its neighbors to address "the Agreement's shortcomings and our trade deficits."

What 'not renewing' actually means

The move does not end the deal. Because the three parties did not unanimously agree to a 16-year extension, the agreement now enters a mandatory schedule of annual reviews. If all three reach agreement in any year, the pact can still be extended; if they never do, it expires in 2036. Throughout that window it remains in force, so no tariffs change automatically as a result of Tuesday's decision. A country may exit with six months' notice.

What is at stake

The agreement covers well over a trillion dollars in annual trade across the continent, and roughly 85 percent of Canadian exports still enter the United States tariff-free under its rules. Those rules, however, now sit alongside a separate layer of sectoral tariffs the Trump administration has imposed on steel, aluminum, autos and lumber — levies critics say already undercut the pact's guarantees. Business groups warned that a year-to-year horizon chills the long-term investment that supply chains depend on.

Washington has signaled it wants a tougher deal, including higher North American content requirements for automobiles and changes to Canadian dairy and digital rules, with reducing trade deficits its stated aim.

Canada and Mexico respond

Canada struck a supportive but wary tone. Trade Minister Dominic LeBlanc said Ottawa "reaffirmed Canada's unwavering support" for renewal, The Globe and Mail reported, while pressing to lift the sectoral tariffs still hitting Canadian goods. Prime Minister Mark Carney said he wanted "a new deal," not a quick signature on the old one.

Mexican President Claudia Sheinbaum, who had backed a 16-year extension, sought to lower the temperature. "The joint work continues — it's not as if everything ends today," she told reporters, CBC News reported. U.S. and Mexican negotiators are set to meet again the week of July 20; formal talks with Canada have yet to begin.