USMCA to Remain in Effect for Up to 10 Years

The U.S. government has decided not to automatically renew the trilateral trade agreement with Canada and Mexico, the USMCA, but it will remain in effect for the next decade, subject to annual reviews, the Office of the U.S. Trade Representative (USTR) announced.

The widely anticipated decision was announced today following a virtual meeting among representatives from the three countries, as the deadline approached for the parties involved to decide whether to renew the pact for another 16 years, in accordance with the original terms of the agreement that took effect in July 2020.

The announced measure means that the USMCA will remain in effect for another 10 years, provided that no member attempts to withdraw. However, it also triggers annual reviews that could result in the renegotiation of significant parts of the treaty.

The Office of the U.S. Trade Representative added that the United States and Mexico have already begun a series of bilateral negotiations, with the third round scheduled for July 20.

It is worth noting that the Trump administration currently maintains 25% tariffs on light vehicles and auto parts produced in Canada and Mexico.

However, if the products meet regional content rules, the tariff applies only to the non-U.S. portion of those products.

It also maintains a 50% tariff on steel and aluminum from both countries.