Speaking at the White House, Trump criticised trade imbalances with both neighbouring countries and stated that discussions are ongoing with Canadian and Mexican leaders.
The USMCA, which replaced the North American Free Trade Agreement (NAFTA) on 1 July 2020, governs nearly $1.6tn in annual trade among the three countries.
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The agreement supports economic integration across North America and was introduced following Trump’s criticisms of NAFTA, which he described as the “worst trade deal” he had ever seen.
Despite the agreement’s aim to promote balanced and reciprocal trade, Trump emphasised that he is not considering its renewal. “I’m not looking to renew it,” Trump said at the White House.
“We don’t need anything that Canada has. We don’t need anything that Mexico has, but they need everything that we have. They have to treat us better” Trump said.
However, talks on the future of the USMCA are ongoing. The US Trade Representative’s Office confirmed that the US and Mexico are scheduled for further negotiations in Washington on 16 and 17 June, with discussions set to focus on agriculture and creating a “level playing field.”
A third round of talks is planned for the week of 20 July in Mexico City. Canada’s minister responsible for Canada-US trade, Dominic LeBlanc, reported a positive meeting regarding the agreement’s review but indicated that no date has been set for formal negotiations between Canada and the US.
Commenting, Dr Sheng Lu, professor of apparel studies at the University of Delaware, told Just Style non-renewal of the pact could be detrimental to all of the trading partners involved.
“Trade data shows that the USMCA matters significantly to the US textile and apparel industry and to the Western Hemisphere textile and apparel supply chain.
“According to the US Office of Textiles and Apparel data, the USMCA has been the single largest export market for US-made yarns and fabrics, with no alternative. In the first four months of 2026, about 48.4% of US yarn and fabric exports went to USMCA members, including 33.9% destined for Mexico. Likewise, in the first three months of 2026, nearly 98% of Mexico’s apparel exports went to the United States.
“Data from the US International Trade Commission further shows that almost 94% of those exports claimed duty-free benefits under the USMCA. These trade patterns have been highly consistent over the past decades, thanks to the USMCA and NAFTA, the earlier version of the agreement. Also, because of the USMCA, US apparel imports from Mexico were largely exempt from the hiking tariffs since Trump’s second term. Without the agreement, US fashion companies may significantly reduce their interest in sourcing apparel from the region, which will ultimately reduce USMCA members’ demand for US-made textiles.”
Trade figures from 2025 show the US had a $46bn goods trade deficit with Canada and a $197bn deficit with Mexico. Mexico has been the top US trading partner since 2023, with about 80% of Mexican exports destined for the US.
Nearly 70% of Canadian exports also go to the US, while both countries purchase roughly one-third of exported US goods.
Under current rules, the USMCA is set to expire automatically on 1 July 2036 unless all three nations agree to extend it by 16 years.
If an extension is not agreed, the pact enters a decade-long cycle of annual reviews. If all parties approve the extension, another review is scheduled for 2032.
Neil Saunders, MD of retail at GlobalData, pointed out that while the USMCA isn’t perfect in terms of allowing frictionless trade and isn’t as generous as NAFTA was, it has been broadly helpful to apparel firms in that it has softened some restrictions.
“If the deal isn’t renewed, then it won’t create huge changes to trade on day one – the deal has sunset clauses, which means the provisions roll over and remain in force for some time.
“The bigger danger comes from the more drastic step of the US pulling out entirely. President Trump has not said he will opt for this, but if he did, it would mean a reversion to standard rules of trade or old agreements, which could create enormous disruption for apparel and other industries.
“The other option is to renegotiate parts of the deal which, from the US side, would likely mean a tightening of rules around foreign components in garments, more audits of apparel firms, and pressure for Canada and Mexico to use more North American-made components in garments. This would be unhelpful, but surmountable.
“As usual, however, the current issue is uncertainty. Apparel firms plan in advance while policy seems to be made on the hoof; two things do not sit well together.”
