Quick overview

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The Trump administration signaled that it intends to maintain tariffs on key trading partners and seek stricter trade rules as part of the ongoing review of the United States-Mexico-Canada Agreement (USMCA).

U.S. Trade Representative Jamieson Greer said the administration plans to continue using tariffs in its trade strategy with both Mexico and Canada, arguing that large trade imbalances justify the measures. The comments come as Washington and the government of Claudia Sheinbaum engage in bilateral talks ahead of the agreement’s formal review process.

“We are going to apply tariffs as long as we have a massive trade deficit,” Greer said at a policy forum. “The reality is that we have spent the last year and a half visiting countries and telling them that some level of tariffs will be necessary.”

The U.S. position became increasingly clear in May, when Deputy U.S. Trade Representative Jeffrey Goettman stated at the Council of the Americas Annual Conference that the administration intends to “improve” the USMCA through stricter rules of origin and enhanced supply-chain transparency requirements.

Two days later, Greer emphasized that negotiations would focus on strengthening regional content rules and introducing new economic security provisions designed to encourage the relocation of manufacturing activity to the United States.

Focus on Rules of Origin and Economic Security

Mexico and the United States launched the first official round of bilateral discussions on the USMCA review this week, led by Mexican Economy Secretary Marcelo Ebrard and Greer.

The talks are centered on four key areas: tighter rules of origin, economic security measures, cooperation on critical minerals, and the resolution of longstanding bilateral trade disputes.

Washington’s objectives include increasing North American content requirements in strategic industries—particularly the automotive sector—tightening origin standards for steel and aluminum, and reducing the U.S. trade deficit with Mexico, which currently stands at roughly $200 billion.

Canada Remains Outside the Current Talks

Despite the progress in bilateral discussions, Canada is not participating in the current negotiating round, limiting the ability of the parties to reach formal agreements. Because the USMCA is a trilateral treaty, any substantive modifications ultimately require the involvement of all three member countries.

The formal joint review of the agreement is scheduled to begin on July 1, 2026. If no consensus is reached, the treaty will enter a cycle of annual reviews through 2036, creating the possibility of prolonged uncertainty for businesses operating across North America.