As the clock ticks toward the July 1 joint review deadline for the United States-Mexico-Canada Agreement (USMCA), the Office of the United States Trade Representative (USTR) said earlier today that the U.S. and Mexico will kick off bilateral negotiating rounds related to the joint review.
The Office of the USTR said that on May 28 and May 29, Deputy United States Trade Representative Ambassador Jeff Goettman will lead a U.S. delegation to Mexico City for the first bilateral negotiating round with Mexico, which will feature negotiations on economic security and rules of origin for key industrial goods. It added that on June 16-17, the U.S. and Mexico will hold a second negotiating round in Washington, D.C., that will include discussions on agriculture and a level playing field, followed by a third negotiating round in Mexico City on July 20.
“The negotiations will focus on ensuring that the USMCA benefits U.S. manufacturers, farmers, ranchers, workers, service suppliers, and businesses of all sizes, including small and medium-sized enterprises,” according to the Office of the USTR.
The USMCA agreement went into effect on January 29, 2020, during President Trump’s first term in the White House, replacing its predecessor, the North American Free Trade Agreement.
USMCA, in various ways, is based on many of the same rules, procedures, and products as NAFTA, which took effect in 1994. Analysts say that it includes stronger environmental and labor regulations and incentivizes domestic production of cars and trucks. It is also the first free trade agreement to include intellectual property protections, which are especially timely given the current trade wars triggered by the alleged theft of American intellectual property by China and other nations.
Former United States Trade Representative Robert Lighthizer said at the time that USMCA marked a significant improvement over NAFTA through its objectives to create more manufacturing jobs, protect America’s competitive advantage in technology and innovation, secure greater market access for American businesses, farmers, and ranchers, and, critically, change the stale politics of trade by creating bipartisan consensus around a new model that works better for all Americans.
Regarding Mexico, Mexican imports to the U.S. that qualify under USMCA rules of origin are exempt and able to enter the U.S. duty-free, while imports not covered under USMCA are subject to a 25% tariff. In a March 2025 letter to Claudia Sheinbaum, president of Mexico, Trump stated that the United States imposed tariffs on Mexico, the largest U.S. trading partner, to address the nation’s fentanyl crisis, which he said was caused in part by Mexico’s failure to stop the cartels.
In addition to the 25% tariff on goods that do not qualify under USMCA origin rules, tariffs currently imposed by the U.S. on Mexico include a 25% tariff on steel and a 10% tariff on aluminum; a 25% tariff on autos and auto parts that do not meet USMCA content or labor thresholds; and a 20% fentanyl tariff on non-originating goods.
As previously reported, last September the Office of the USTR announced there would be a public consultation process in advance of the July 1, 2026, joint review of USMCA. According to the USTR, the consultation process is required by law, and the focus of solicited public comments includes, but is not limited to:
- Any aspect of the operation or implementation of the USMCA;
- Any issues of compliance with the Agreement;
- Recommendations for specific actions that USTR should propose ahead of the Joint Review;
- Factors affecting the investment climate in North America and in the territories of each party, as well as the effectiveness of the USMCA in promoting investment that strengthens U.S. competitiveness, productivity, and technological leadership; and
- Strategies for strengthening North American economic security and competitiveness, including collaborative work under the Competitiveness Committee and cooperation on issues related to non-market policies and practices of other countries
Pete Mento, Director of Global Trade Management Services at Baker Tilly, told LM that, regarding the pending July 1 USMCA review, each nation is going to be very aggressive, knowing that each has some sort of leverage.
“What’s been super fascinating to me is that Mexico and Canada appear to be working together, collaborating, and doing what they can to try to negotiate from a position of strength together,” he said. “The Mexico that we have today in 2026 is not the Mexico that was negotiating with us in 1991 and 1992 for NAFTA. It is one of the most important exporting manufacturing countries in the world and has become a nation of first resort for many countries, especially China, looking for inexpensive skilled labor to take advantage of the West. So, I think the negotiations are going to be pretty vigorous—that’s a good word for it—between the three countries, and the U.S. has already said, ‘We have absolutely no problem walking away from this agreement completely and negotiating bilateral agreements with Canada and Mexico.’
So think about, particularly in automotive manufacturing, how much business crosses those two borders in this sort of tri-national trade system, where a component is made in one country, sent to another country for additional manufacturing, and then sent to a third for final assembly before being shipped to all three for consumption. Having that taken away could be detrimental to so many supply chains that have been built around the notion that all three nations are open for trade with each other.”
