The United States, Canada and Mexico are approaching a July 1 deadline to complete the scheduled review of the United States-Mexico-Canada Agreement. Negotiators and political leaders, including Canadian Prime Minister Mark Carney, now expect the date to pass without a finalised outcome. Formal trilateral talks remain on the calendar, but officials briefed on the discussions say the process is likely to run through the summer with no fixed endpoint in sight.

The agreement underpins a market of 510 million people and supports roughly $1.6 trillion in annual cross-border trade. It is central to supply chains that span the continent, most visibly in the automotive sector, where components frequently cross borders several times before a vehicle is assembled. The pact also shields Canada and Mexico from a wider set of US tariffs that have been applied elsewhere. Polling suggests the deal retains strong public backing in the United States, with roughly three-quarters of Americans saying it benefits the economy.

The list of unresolved issues is long. Washington wants greater access for American producers to the Canadian dairy market, an end to Canadian digital taxes on major US streaming platforms, and the removal of provincial boycotts of American alcohol that Canadian regions imposed in response to earlier US tariffs. Rules of origin for vehicles built in North America have become a particular focus of separate bilateral talks between the United States and Mexico, with Washington pushing for tighter thresholds. Canada, for its part, wants relief from US tariffs on steel, aluminium and cars. Canadian business groups have said they would rather wait for a workable long-term agreement than accept a rushed deal on unfavourable terms. Talks came close to resolution last autumn before a Canadian television advertisement criticising US tariffs angered the American president and set the process back, a reminder of how easily progress can unravel.

Missing the deadline does not bring the agreement to an end. The USMCA remains legally binding regardless of what happens on July 1, with its current term running until 2036. From here, three outcomes are possible. The three governments could agree to a sixteen-year extension, which would push the expiration date to 2042. Failing that, the pact would move into a cycle of annual reviews that would continue until it lapses. Any of the three countries could also give formal notice of withdrawal, which requires six months to take effect. Trade analysts consider the annual review scenario the most probable path forward. Outright withdrawal is regarded as unlikely, but a prolonged cycle of yearly reviews carries its own risks, since it would leave businesses across the continent planning investments without knowing whether the underlying rules might shift each year.

The public positioning of the three governments has not been consistent. The US president has at various points suggested he might scrap the agreement altogether and, at other times, indicated he wants to preserve it largely as it stands. Canadian and Mexican officials have both said they intend to keep the core structure of the deal intact, even as they acknowledge the negotiations have stalled repeatedly. Officials in Ottawa and Mexico City have said they remain ready to move quickly if Washington signals it wants to close out the review, despite the current lack of momentum.

For now, the deadline itself carries more symbolic than legal weight. The agreement will continue to operate as written, and businesses that depend on it face no immediate disruption. What remains unclear is how long the review can be extended before the uncertainty itself starts to affect investment decisions on both sides of the border. With no fixed date for resolution and several contentious issues still open, officials on all sides are preparing for a negotiation that could stretch well beyond the summer.

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