USMCA Negotiations vol. 2 - Where Things Stand Now On July 1

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USMCA Negotiations vol. 2 - Where Things Stand Now On July 1

Canada | Cross-Sector Views EquityJulyResearch1, 2026

Feature Canada-U.S. Track Mexico-U.S. TrackUSMCA Negotiations vol. 2 - Where Things Formal talks stalled; discussions Completed two rounds of bilateral

Negotiation Progress limited to video conferences and talks; first official round scheduled

informal visits. in Mexico City for late May.Stand Now On July 1 Highly contentious disputes over Deep supply chain integration and

Key Sector Alignment dairy, provincial alcohol bans, shared focus on limiting non-

and digital regulations. market inputs.

The mandatory July 1 USMCA joint review shifted from a routine assessment Negotiating Stance Rigidconcessions;resistanceinsistenceto unilateralon Pragmaticorigin and screeningalignmentofonforeignrules of

Source: Jefferies, Governments of Canada, Mexico and theinto a high-stakes renegotiation under Trump 2.0. Given contentious U.S.– . reciprocal tariff relief. investments. U.S.

Canada talks, the two economies now face ambiguity without the formal

renewal, moving to annual reviews with the U.S. pursuing bilateral carve-outs.

Trade keeps flowing, but policy uncertainty is extended indefinitely. While

negative for the economic outlook, it is preferable to the devastation of a full

withdrawal.

As we have now passed the July 1 deadline to renew the USMCA, the agreement has now

devolved into 10 years of annual reviews until the agreement renegotiated or expires (unlikely).

While President Trump recently disparaged the agreement that he negotiated six years ago, it is

unlikely that the U.S. will terminate the agreement. However, even with progress between Mexico

and the U.S., we see no immediate resolution between Canada and the U.S., with pundits going as