The Trump administration is reportedly gearing up to renegotiate the U.S.-Mexico-Canada Agreement (USMCA), the largest free trade deal of the United States. The process is expected to commence within the next month.
US Set To Launch USMCA Renegotiation Consultations
The Office of the U.S. Trade Representative is set to begin public consultations for the renegotiation, a process mandated by the 2020 law that implemented the pact. The consultations must commence by Oct. 4, and will likely be the first step in a lengthy renegotiation process, reported The Wall Street Journal.
President Trump's team is expected to seek input from companies and unions this week. The renegotiation will likely feature a mandatory six-year review, with the first formal trilateral USMCA review set for July 1, 2026.
The USMCA, signed by Trump in 2020, replaced the 1992 North American Free Trade Agreement (NAFTA). Despite being a key trade achievement of Trump’s first term, the USMCA has been undermined by the administration’s imposition and subsequent reduction of tariffs on Canada and Mexico.
Automobile, Alcohol Industry In Focus
The renegotiation of the USMCA comes at a critical time for North American trade. The U.S. has been embroiled in trade disputes with both Canada and Mexico, with tariffs affecting key industries. Trump ally, Sen. Bernie Moreno (R-Ohio), stated that he anticipates the administration will push for stricter U.S. content requirements across many products, particularly automobiles.
Earlier in the year, U.S. alcohol exports to Canada plummeted by over 60%, causing substantial losses for American producers. Even large players like Constellation Brands Inc. (NYSE:STZ) and Molson Coors Beverage Co. (NYSE:TAP) exposed to earnings volatility.
Carney, Sheinbaum Show Co-operation
Canadian Prime Minister Mark Carney spoke with Trump on Monday evening to discuss trade and other issues, noting on Wednesday that the two countries "are making progress." Carney noted that much of the trade between the two countries is duty-free under the USMCA.
The U.S. and Mexico are preparing to launch consultations following Secretary of State Marco Rubio's meeting with President Claudia Sheinbaum in Mexico City. The talks centered on cross-border security, which is viewed as a critical step toward a broader trade agreement, especially after Trump warned of punitive tariffs unless Mexico intensifies efforts against drug trafficking.
READ NEXT:
Image via Shutterstock
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
