U.S., Mexico open USMCA talks as Trump questions trade pact renewal

Traders Union
All News
Financial News
US, Mexico open USMCA talks

Highlights

Closed-door US-Mexico USMCA negotiations focus on US demands for 50% US vehicle content, 82% regional content, and agriculture market access.
Agricultural groups urge 16-year USMCA extension, protection of $58.6 billion in farm exports, stronger GMO corn rules, and expanded ethanol and dairy access.
July 1 trade deadline triggers 10-year termination clock if no extension, while Trump questions renewal, raising uncertainty for North American agriculture and energy sectors.

Agriculture and energy dominate Washington agenda

As reported by Reuters, the latest closed-door meetings follow negotiations last month in Mexico City that exposed broad U.S. demands, including a proposal to require 50% U.S. content in North American vehicles and to lift the regional content threshold to 82%. Canada remains outside the formal talks so far, although Trade Minister Dominic LeBlanc continues meetings with U.S. Trade Representative Jamieson Greer.

Farm groups are pressing the Trump administration to extend the U.S.-Mexico-Canada Agreement for another 16 years while preserving duty-free agricultural trade, strengthening rules on genetically modified corn and improving ethanol access in Mexico. They also want better entry to Canada's protected dairy market, arguing that Mexico and Canada together account for more than $58.6 billion in U.S. farm exports in 2025, according to U.S. Department of Agriculture data.

The U.S. and Mexico also seek progress on a long-running energy dispute tied to Mexico's stronger state role in the sector and support for Pemex. The American Petroleum Institute says Mexico is using the lengthy USMCA dispute process to favor the state producer over private and foreign investors, and it wants a rapid-response compliance mechanism for state-owned enterprises.

Trade deadline raises pressure on North American industries

The three countries must decide by July 1 whether to extend the pact in its current form or recommend changes, but a full renegotiation is not expected by that date. Instead, the deadline is widely seen as the start of a 10-year termination clock while further talks continue, with a third U.S.-Mexico round already scheduled in Mexico City for the week of July 20.

Trump says he is not looking to renew the agreement, though it remains unclear whether the remark is a negotiating tactic. He has repeatedly criticized the pact he signed in 2020, especially as the U.S. continues to run goods trade deficits with Canada and Mexico, and his administration has already altered trade conditions through unilateral tariffs on autos, steel and aluminum from both countries.

Industry groups warn that failure to renew USMCA would hit U.S. agriculture hard, even as the U.S. records agricultural trade deficits with Mexico and Canada. Corn growers say wider ethanol blending in Mexican cities could reduce the imbalance and add as much as $2 billion in annual U.S. ethanol exports, while biotech groups want clearer rules preventing Mexico from using non-scientific grounds to restrict trade in genetically modified corn.

Our earlier coverage of the Make More in America Act explained how Senate Democrats proposed expanding the Export-Import Bank’s mandate to finance domestic manufacturing in strategic sectors such as semiconductors, AI, critical minerals, and energy technology. The bill was positioned as a response to supply-chain shocks and rising input costs, with the goal of reducing reliance on China-linked networks while boosting U.S. jobs and industrial resilience.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.