Mexico bets on negotiating and keeping the USMCA in place beyond 2036 despite Washington rejecting an automatic extension
The USMCA’s annual review opens a negotiating phase in which Mexico is seeking certainty and fewer tariffs to sustain investment and exports.
Mexico’s government is looking to take the pressure off the debate over the USMCA’s future after the United States decided not to grant an automatic 16-year extension, and it argues that the trade agreement is not at immediate risk. Marcelo Ebrard, Mexico’s economy minister, said there are no “fundamental” differences among the three partners that would prevent extending the treaty at any time, and he stressed that the pact remains in force through 2036—unless one of the countries formally triggers its withdrawal, following the notice process laid out in the agreement itself.
From Mexico’s perspective, Washington’s refusal does not signal a break, but rather the start of a phase that was built into the agreement’s design: periodic—annual, in this case—reviews to address outstanding issues and keep regional productive integration up to date. The next round of talks is expected around July 20, when a U.S. delegation visits Mexico to move fully into the first formal annual review.
The timing matters for Mexico’s economy. In recent years, integration with the United States has been the main buffer against global volatility: strong export momentum, the nearshoring boom, and the expansion of supply chains in sectors such as auto parts, home appliances, and electrical equipment have been pillars of industrial activity. Still, regulatory uncertainty, border logistics, and trade tensions—including sector-specific tariffs—continue to weigh on long-term investment decisions, especially in capital-intensive manufacturing.
Ebrard argues that if there were a real intention to leave the agreement, the United States would have already launched the corresponding procedure. That is why Mexico is betting the review process can become a forum for adjustments: settling disputes, reshuffling priorities, and above all preserving certainty for companies operating highly integrated regional supply chains.
Tariffs, rules of origin, and the dispute over regional competitiveness
One of Mexico’s core goals is to reduce the overlap between the USMCA and tariff measures the United States applies under Section 232, particularly on steel, aluminum, and certain components tied to the auto industry. For exporters, those added costs distort the logic of the agreement: even with preferential access, the imposition of tariffs on “national security” grounds can undermine competitiveness, disrupt input prices, and raise the cost of final exports. At the same time, Mexico is seeking to strengthen rules of origin that encourage regional content without undermining the viability of existing supply chains—an especially delicate balance for industries that rely on global sourcing but compete on delivery times and costs.
The review is also taking place amid a broader geoeconomic reshuffle. The United States has tightened its industrial and trade policy to reduce dependence on Asia for strategic inputs, while Mexico is trying to position itself as a North American advanced-manufacturing platform. In the official narrative, the way to narrow deficits and bring back manufacturing jobs would not be by weakening the agreement, but by deepening regional production with greater integration of suppliers, infrastructure, and technological capabilities.
Another sensitive point is the modernization of chapters and disciplines that indirectly affect competitiveness: trade facilitation, technical standards, customs processing times, and certainty for manufacturing investment. For Mexico, each operational improvement at the border can translate into lower logistics costs and greater appeal for reshoring and relocation projects—particularly as the country competes for capital against other economies that also offer access to the U.S. market.
According to Ebrard, the concerns listed by the U.S. trade authority have narrowed compared with its initial framing, suggesting the negotiation could close gaps over time. Even so, the annual process introduces an element markets often penalize: the idea of “continuous review,” which forces governments and businesses to operate on a recurring adjustment calendar.
For Mexico, the key will be to turn that calendar into a source of certainty—through partial, verifiable agreements—rather than a mechanism of permanent friction. The outcome will shape investment decisions, export-production planning, and perceptions of country risk, especially in sectors where projects require long payback horizons.
In perspective, the USMCA review opens a window to correct distortions such as sector-specific tariffs and to update rules that will define the region’s competitiveness. The most relevant signal for now is that none of the parties has triggered a formal exit: the negotiation will be the thermometer measuring whether North America chooses to deepen integration or manage its differences year after year.
