Why It Matters

The United States declined to renew the pact in its current form at the United States-Mexico-Canada Agreement (USMCA) joint review on July 1, while Canada and Mexico backed renewal. The pact remains in force pending resolution of outstanding issues or until scheduled termination. According to a new Congressional Research Service (CRS) report, the outcome leaves the Trump administration on a renegotiation path that preserves temporary stability but prolongs uncertainty for investment and supply chain planning.

Because no prior review of this kind has occurred under any United States free trade agreement, Congress lacks a template for scope, domestic procedure, or trilateral handling, and lawmakers retain leverage through consultation rules, oversight, and any needed implementing legislation under the law that approved the pact.

House Ways and Means Chairman Jason Smith (R-MO-8) said the Trump administration had taken the process seriously and expressed confidence the president would defend workers and job creators, while Ranking Member Richard Neal (D-MA-1) said the pact reflects congressional will and warned against trade chaos and higher costs.

The Big Picture

The pact entered into force on July 1, 2020, replacing the 1994 North American Free Trade Agreement, and carries a 16-year term ending July 1, 2036 unless all three governments confirm continuation.

Article 34.7 called for recommendations at least one month before a six-year review, written confirmation through heads of government to extend, automatic extension for another 16 years upon unanimous consent, and additional yearly reviews if unanimity was absent, separate from a right to withdraw on six months written notice.

During original bargaining, officials in the first Trump administration proposed a five-year sunset under which the president would decide continuation, an Office of the United States Trade Representative official argued periodic renewal would keep pacts current, Canadian and Mexican officials countered that expiration risk would chill investment, and then-United States Trade Representative Robert Lighthizer argued periodic scrutiny would strengthen legislative oversight compared with agreements of indefinite duration.

Domestic procedure required a Federal Register notice at least 270 days before review, and the office issued a notice September 17, 2025 and convened a public hearing December 3 to December 5, 2025.

The statute also called for a report at least 180 days before a six-year review covering operation, precise proposals, extension posture, prior remedial efforts, and views of advisory panels created under Section 135 of the Trade Act of 1974, and Ambassador Jamieson Greer told House Ways and Means and Senate Finance panels in December 2025 that briefings satisfied the mandate, though some lawmakers sought a written account.

After a non-renewal, the statute calls for a briefing within 20 days on national positions and agreed actions, timely updates thereafter, a detailed report at least 70 days before the next yearly session, and production of any draft text on request.

Bilateral tracks have diverged, with Washington and Mexico City continuing rounds linked to a joint statement July 23 from Ambassador Greer and Secretary Marcelo Ebrard, while Washington and Ottawa have announced no formal talks amid higher friction after August American duties of 50 percent on certain Canadian goods to offset alleged discrimination and subsequent Canadian countermeasures.

Potential subjects identified for lawmakers include Canadian dairy, digital services and provincial limits on distribution of American alcohol, Mexican agriculture, labor and energy, plus revisions to duty-free origin rules including automotive content, alongside distinct tariff tools under Section 301 of the Trade Act of 1974, Section 338 of the Tariff Act of 1930, and Section 232 of the Trade Expansion Act of 1962.

The Bottom Line

Format and timing for required yearly sessions remain unannounced, so near-term attention centers on whether the executive branch can outline interim arrangements by the end of the year, as previewed at a Senate Finance hearing July 22.

Any changes requiring amendments to U.S. law would generally require congressional action. Lawmakers could clarify oral versus written reporting, weigh appropriations and directives for the trade office, and decide whether to reinforce or restrain delegated duty powers or to codify elevated rates to encourage compliance versus removing duties to underscore duty-free commerce.

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