{"id":7555,"date":"2026-06-28T16:35:23","date_gmt":"2026-06-28T16:35:23","guid":{"rendered":"https:\/\/pronews.in\/index.php\/2026\/06\/28\/if-usmca-is-not-renewed-analysts-expect-uncertainty-for-businesses\/"},"modified":"2026-06-28T16:35:23","modified_gmt":"2026-06-28T16:35:23","slug":"if-usmca-is-not-renewed-analysts-expect-uncertainty-for-businesses","status":"publish","type":"post","link":"https:\/\/pronews.in\/index.php\/2026\/06\/28\/if-usmca-is-not-renewed-analysts-expect-uncertainty-for-businesses\/","title":{"rendered":"If USMCA is not renewed, analysts expect uncertainty for businesses"},"content":{"rendered":"<div aria-live=\"polite\" aria-atomic=\"true\">\n<p><strong>Vancouver, Canada \u2013<\/strong> As the trade agreement between the United States, Mexico and Canada comes up for its first joint mandatory review on July 1, experts say the chances of it being renewed have reduced, given how mercurial US President Donald Trump can be.<\/p>\n<p>Trump had pushed for a new deal during his first term to replace the North America Free Trade Agreement, or NAFTA.<\/p>\n<section>\n<h2>Recommended Stories <\/h2>\n<p><span>list of 4 items<\/span><\/p>\n<ul>\n<li><span>list 1 of 4<\/span><a href=\"http:\/\/www.aljazeera.com\/economy\/2026\/6\/26\/new-york-city-freezes-rents-for-one-million-regulated-apartments\">New York City freezes rents for one million regulated apartments<\/a><\/li>\n<li><span>list 2 of 4<\/span><a href=\"http:\/\/www.aljazeera.com\/news\/2026\/6\/26\/trump-threatens-tariffs-for-countries-that-levy-digital-tax-on-us-firms\">Trump threatens tariffs for countries that levy digital tax on US firms<\/a><\/li>\n<li><span>list 3 of 4<\/span><a href=\"http:\/\/www.aljazeera.com\/economy\/2026\/6\/26\/us-federal-judge-questions-doj-decision-to-drop-adani-charges\">US federal judge questions DOJ decision to drop Adani charges<\/a><\/li>\n<li><span>list 4 of 4<\/span><a href=\"http:\/\/www.aljazeera.com\/news\/2026\/6\/26\/us-strikes-iran-in-response-to-drone-strike-on-commercial-ship\">US strikes Iran in response to drone strike on commercial ship<\/a><\/li>\n<\/ul>\n<p><span>end of list<\/span><\/section>\n<p>The result was the USMCA agreement, which came into effect on July 1, 2020, and is slated to expire after 16 years.<\/p>\n<p>Now, on the USMCA\u2019s sixth anniversary, the three countries involved are set to decide whether the trade deal should continue for another 16 years.<\/p>\n<p>But it is unclear what the outcome of the review process might be, and critics warn that the uncertainty it creates could generate complications for businesses.<\/p>\n<p>If all three countries fail to commit to an extension, it triggers an annual review process, which would put the USMCA up for debate every year until 2036.<\/p>\n<p>\u201cWe may get mandatory annual reviews, but that also means that uncertainty prevails, and that\u2019s a negative for decision-making for businesses,\u201d said Tony Stillo, director of Canada Economics at Oxford Economics, an advisory firm. \u201cIt\u2019s a definite dampener, for sure.\u201d<\/p>\n<p>That, however, is the situation analysts currently expect to result from the July review.<\/p>\n<p>\u201cThe most likely scenario is that it will go into an annual renewal process,\u201d said Vina Nadjibulla, vice president and head of research at the Asia Pacific Foundation of Canada, a nonprofit think tank.<\/p>\n<p>But she added that the dynamics of July\u2019s negotiations remain unclear. She pointed to a lingering question: \u201cIs nothing agreed till everything is agreed, or is incremental change acceptable?\u201d<\/p>\n<p>In the worst case, any party could give six months\u2019 notice and cancel the trade agreement altogether.<\/p>\n<p>Nadjibulla noted that Trump might be leaning in that direction. \u201cHe has said he wished [the USMCA] didn\u2019t exist,\u201d she said.<\/p>\n<p>Trump himself told reporters this month that he felt the US did not need the trade deal.<\/p>\n<p>\u201cI don\u2019t know that I\u2019m going to renew it,\u201d he said on June 10, before signalling he is open to negotiation with the deal\u2019s other parties. \u201cWe\u2019re talking to them. We\u2019ll see if we do something.\u201d<\/p>\n<p>A week later, Trump voiced further ambiguity about the US stance. \u201cI would rather not have the agreement, but I may sign it,\u201d he said during his visit to Paris.<\/p>\n<h2 id=\"protection-against-tariffs\">Protection against tariffs?<\/h2>\n<p>Unlike Trump, the leaders of Canada and Mexico have said they want the trade agreement to continue.<\/p>\n<p>The USMCA has been particularly beneficial to the two countries in the wake of the tariffs that Trump unleashed last year, after taking office for a second term. Goods traded under the agreement have been largely exempt from the added taxes.<\/p>\n<p>But Trump has used different legal tools to tax even USMCA-compliant goods. His administration has, for example, turned to Section 232 of the Trade Expansion Act, which allows economic penalties on products that \u201cthreaten to impair\u201d US security.<\/p>\n<p>He has invoked that law to impose 50 percent tariffs on Canadian steel, aluminium, and copper, as well as 25 percent tariffs on non-US content of USMCA-compliant automobiles. There has also been a 10 percent tax added to some lumber products.<\/p>\n<p>Products outside the USMCA\u2019s protections were subject to particularly steep tariffs, though.<\/p>\n<p>The Trump administration formerly used the International Emergency Economic Powers Act (IEEPA) to impose sweeping tariffs worldwide, until the\u00a0<a href=\"http:\/\/www.aljazeera.com\/news\/2026\/2\/20\/us-president-trump-promises-new-tariffs-slams-supreme-court-decision\" target=\"_blank\" rel=\"noopener\">US Supreme Court ruled such taxes to be unconstitutional<\/a> in February.<\/p>\n<p>But the White House responded to the Supreme Court ruling by issuing a <a href=\"http:\/\/www.aljazeera.com\/economy\/2026\/5\/12\/us-court-pauses-decision-blocking-trumps-10-percent-global-tariff\" target=\"_blank\" rel=\"noopener\">10 percent global tariff<\/a>, using Section 122 of the Trade Act, which allows the US to address \u201clarge and serious\u201d balance-of-payments deficits.<\/p>\n<p>The Trump administration has threatened to raise that rate to 15 percent in the coming months, though those tariffs are currently facing legal challenges.<\/p>\n<p>It has also proposed additional tariffs on both Canada and Mexico, accusing them of failing to enforce measures to stop forced labour.<\/p>\n<p>Mexico and Canada are two of the US\u2019s largest trading partners. Until recently, Canada, for instance, sent nearly 80 percent of its exports to the US.<\/p>\n<p>The USMCA has allowed much of that trade to be shielded from Trump\u2019s shifting tariff policies.<\/p>\n<p>But analysts like Stillo in Canada warn that having the USMCA subject to an annual review process could weaken the trading bloc\u2019s economies.<\/p>\n<p>\u201cAnnual reviews will be \u2018a big headwind\u2019,\u201d he told Al Jazeera.<\/p>\n<p>Canada is likely to push for tariff relief as part of the USMCA review, a critical issue for the country\u2019s economic outlook, according to Stillo.<\/p>\n<p>\u201cOur view of the economy improving in the second half of this year and into next year was based on a drop in tariffs,\u201d he said.<\/p>\n<h2 id=\"a-risk-to-us-exports\">A risk to US exports<\/h2>\n<p>But the USMCA has also been a boon for US businesses, which export products such as automotive parts, aircraft, petroleum and computers to Canada and Mexico.<\/p>\n<p>According to <a href=\"https:\/\/www.piie.com\/blogs\/realtime-economics\/2026\/which-states-and-products-risk-greatest-losses-if-usmca-terminated\" target=\"_blank\" rel=\"noopener\">a data analysis<\/a> from the Peterson Institute of International Economics, the majority of exports from some US states go\u00a0to Canada and Mexico and are shipped under the USMCA.<\/p>\n<p>For instance, North Dakota exported 89.9 percent of its goods to Canada and Mexico last year. Michigan was at 64.9 percent, Iowa was at 50 percent, and Arizona was at 39 percent. All of four states voted for Trump in the 2024 election.<\/p>\n<p>Overall, the US also relies heavily on exports to Canada and Mexico in certain product categories. Exports like auto parts, aircraft and oil products generated more than $10bn last year in sales to Canada and Mexico, underscoring the importance of those trading partners.<\/p>\n<p>For instance, 75.6 percent of US exports of parts and accessories for tractors, public transport vehicles, cars and similar automotive devices went to the two neighbouring countries.<\/p>\n<p>The analysis\u2019s authors, Gary Hufbauer and Ye Zhang, wrote that the outcome of the USMCA review could have significant consequences for those US industries and states.<\/p>\n<p>If, for example, Trump cancelled the trade pact, it would enable the US to impose more tariffs on Canadian and Mexican products. That, in turn, might cause those countries to retaliate with their own tariffs \u2014 or look for domestic or third-party substitutes to US goods.<\/p>\n<p>\u201cThere is a danger to US exports on terminating USMCA,\u201d Hufbauer told Al Jazeera.<\/p>\n<p>While the broader US economy might be able to weather the uncertainty, specific businesses and states could suffer, according to his analysis.<\/p>\n<p>But Hufbauer warned that the fallout might not end there. A failed USMCA review could cause long-lasting damage to cross-border relations.<\/p>\n<p>\u201cThe bigger impact on the US is the disruption of our alliances and friendships around the world. The political side is far larger than the economic one in this,\u201d Hufbauer said.<\/p>\n<p>Stillo, for his part, sees the USMCA review as taking place amid a broader global restructure, as traditional alliances are tested.<\/p>\n<p>\u201cWe are in a much more fractured world. It\u2019s not quite de-globalisation, but we are definitely seeing a breaking down in regional blocs,\u201d Stillo said.<\/p>\n<p>For Canada in particular, the economic uncertainty may force leaders to look for a broader array of trading partners.<\/p>\n<p>\u201cWe\u2019re going to always trade with the US,\u201d Stillo said. \u201cBut now it\u2019s about diversifying.\u201d<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Vancouver, Canada \u2013 As the trade agreement between the United States, Mexico and Canada comes up for its first joint mandatory review on July 1, experts say the chances of it being renewed have reduced, given how mercurial US President Donald Trump can be. Trump had pushed for a new deal during his first term &#8230; <a title=\"If USMCA is not renewed, analysts expect uncertainty for businesses\" class=\"read-more\" href=\"https:\/\/pronews.in\/index.php\/2026\/06\/28\/if-usmca-is-not-renewed-analysts-expect-uncertainty-for-businesses\/\" aria-label=\"Read more about If USMCA is not renewed, analysts expect uncertainty for businesses\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":7556,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-7555","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-travel"],"_links":{"self":[{"href":"https:\/\/pronews.in\/index.php\/wp-json\/wp\/v2\/posts\/7555","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pronews.in\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/pronews.in\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/pronews.in\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/pronews.in\/index.php\/wp-json\/wp\/v2\/comments?post=7555"}],"version-history":[{"count":0,"href":"https:\/\/pronews.in\/index.php\/wp-json\/wp\/v2\/posts\/7555\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/pronews.in\/index.php\/wp-json\/wp\/v2\/media\/7556"}],"wp:attachment":[{"href":"https:\/\/pronews.in\/index.php\/wp-json\/wp\/v2\/media?parent=7555"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/pronews.in\/index.php\/wp-json\/wp\/v2\/categories?post=7555"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/pronews.in\/index.php\/wp-json\/wp\/v2\/tags?post=7555"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}