The United States-Mexico-Canada Agreement, which governs most trade across North America, did not get the clean renewal that many manufacturers had hoped for this year. It remains in force, but it now faces a review every year and a possible end date in 2036.

For Asian companies that built factories in Mexico or Canada to serve American customers, the agreement's rules decide whether their goods cross into the United States duty-free. Understanding how the review process works helps explain why that question is still open.

What the Review Clause Says

The USMCA took effect on July 1, 2020, replacing the North American Free Trade Agreement, which had been in force since January 1994, according to the American Conference Institute and the Congressional Research Service.

The newer pact has a built-in expiry. Under Article 34.7, it ends on July 1, 2036, 16 years after it took effect, unless all three countries agree to continue it, the CRS explains. The first joint review was due to start on the sixth anniversary, July 1, 2026.

To extend the deal, each government must confirm its wish to continue in writing, through its head of government. If all three do so, the agreement is automatically extended for another 16 years and the next review falls due by July 1, 2032, according to the CRS.

If any party does not confirm, the three countries must hold joint reviews every year until they all agree to extend or the agreement terminates. The text does not set the format or timing of those annual reviews, and none had been announced as of the CRS report's Sept. 29 update.

Failing to agree does not end the pact immediately, Brookings Institution researchers noted. Separately, under Article 34.6, any member can withdraw by giving the others six months' written notice, a process distinct from the review, the CRS said.

What Happened on July 1

Canada and Mexico affirmed their support for renewing the USMCA on July 1, 2026, according to the CRS. The United States did not agree to renew the agreement “in its current form,” the report said, while U.S. Trade Representative Jamieson Greer said the pact remains in force pending resolution of the outstanding issues.

That outcome sets the annual review cycle in motion. Under U.S. law, the trade representative must report to the House Ways and Means and Senate Finance committees at least 70 days before each annual review in which a country has not confirmed an extension, and must brief those committees within 20 days after the parties meet, according to the CRS.

Before the July meeting, the trade representative's office published a notice seeking public comment on Sept. 17, 2025 and held a public hearing from Dec. 3 to 5, 2025, the CRS said. Brookings researchers had argued that the review should update the pact on autos, supply chain security and labor enforcement, and that all three governments should recommit to its dispute settlement system.

Why It Matters to Asian Manufacturers

The stakes are large. U.S. two-way trade in 2024 totaled $935.1 billion with Mexico and $909.1 billion with Canada, according to Brookings. Mexican exports contain about 40% U.S. content, and autos made in Canada about 50%, the researchers said.

Compliance with the pact's rules has become more valuable as U.S. tariffs elsewhere have risen. Brookings found that the share of U.S. imports from Canada and Mexico claiming USMCA treatment rose from around 50% to more than 85% after Washington put higher tariffs on goods that did not qualify.

That protection has held so far. Law firm Holland & Knight wrote in July that Mexico retained preferential access under the USMCA despite new U.S. tariffs of 10% or 12.5% tied to forced labor, and Haynes Boone said in August that Mexico remained shielded from new U.S. tariffs, according to JD Supra listings of their alerts.

Mexico has also raised its own barriers to Asian imports. In December 2025 it approved tariffs of up to 50% on many goods from countries without trade agreements with it, including China, South Korea, India, Thailand and Indonesia, a move Reuters analysts said appeased the U.S. ahead of the review, FreightWaves reported.

Companies are already weighing where to build. In September, Stellantis was working with suppliers to assess the cost of shifting production of certain pickup truck models to Michigan, according to an excerpt of a Foley & Lardner automotive update listed on JD Supra.

Investors and suppliers should look for three signals: the date and format of the first annual review, the U.S. trade representative's report to Congress at least 70 days beforehand, and any notice of withdrawal under Article 34.6. Each would show whether the three countries are moving toward an extension or toward the 2036 deadline.