USMCA not ending now, but a countdown looms

USMCA sunset – The Trump administration is expected to announce Wednesday it won’t extend USMCA, triggering the pact’s sunset review instead of ending it immediately. Trade officials will meet virtually as the countries argue over changes—especially in auto rules—under a dea

For now, USMCA isn’t going dark. But on Wednesday, the Trump administration is expected to deliver a decision that turns the lights down—starting a decade-long countdown even as the agreement keeps running.

The expected declaration would not end the pact immediately. Instead, it would set off a review process under USMCA’s sunset clause. If the United States, Mexico and Canada don’t agree on changes, the agreement would expire on July 1, 2036.

That is the part that matters to companies trying to plan in years, not weeks. The stakes are hard to ignore: the United States trades about $1.9 trillion a year in goods and services with Canada and Mexico—roughly $5 billion a day. The two countries have also replaced China as America’s top trading partners.

For businesses across the supply chain, the uncertainty is piling up after months of shifting tariffs. Many U.S. Canadian and Mexican companies are looking for stability and clearer rules after Trump imposed tariffs on Mexican and Canadian goods. then later exempted products that qualify for USMCA treatment.

What comes next may hinge on the fight that refuses to cool down: cars.

The biggest fight is over rules for North American auto production. The United States wants stricter requirements for duty-free treatment, including a proposal that North American-built vehicles contain 50% U.S.-specific content.

Oscar Ocampo. director of economic development at the Mexican Institute for Competitiveness. told the Associated Press that the proposal is a red line for both Canada and Mexico. Under the current agreement. automotive products must be 75% made in North America to qualify for duty-free treatment—but no country is guaranteed a specific share of production.

Analysts warn that locking in a U.S.-specific percentage could ripple through existing supply chains. Marcos Carias, an economist at Coface, estimated that prices could rise 5% to 7% on some of the most affected vehicle models.

As the dispute sharpens, the governments are preparing to talk—on a schedule that feels compressed even if the clock runs for years. Trade officials from all three countries are expected to meet virtually on Wednesday.

Canadian Prime Minister Mark Carney said he expects a “constructive exchange,” while adding that there were no agreements to sign. “The priority is to get a new deal,” Carney said. “We’re ready to negotiate an improvement of this agreement.”

The sequence is simple enough to follow even if the outcomes are not: the declaration starts the sunset review; the review demands agreement on changes; and without it. USMCA ends on July 1. 2036. Cars sit at the center of what those changes could mean for costs. sourcing decisions. and the roadmap businesses are trying to build.

USMCA may not be ending this week. But Wednesday’s move is the kind that forces everyone watching the market to start asking the question that can’t be postponed anymore: what version of the trade deal will still be standing when the countdown reaches its first real turning point?

USMCA United States Mexico Canada Agreement Trump administration sunset clause trade review cars auto rules North American content Mark Carney tariffs Mexico Canada negotiations