By Filipa Jorge and Kevin Nealer

June 8, 2026

As has been telegraphed for weeks from both Ottawa and Washington, the CUSMA/USMCA talks will blow past the July 1st review deadline.

USTR Jamieson Greer confirmed as much when he laid out the schedule for the three rounds of U.S.-Mexico talks: May 28-29; June 16-17; and Week of July 20. Lagging U.S.-Canada negotiations and the lack of a trilateral process also make a delay inevitable.

But the biggest risk to USMCA renewal isn’t the talks extending beyond July, or even the amendments the U.S. is demanding.

Instead, we identify three crucial factors that could derail talks:

• Trump trade activism:  Enhanced enforcement to prevent tariff evasion and USTR’s recent proposal of Sec. 301 forced labor tariffs against 60 economies — and expected additional Sec. 301 investigations, namely on pharmaceuticals, digital goods and services, and agriculture — demonstrate the Trump administration’s continued intent to reach into its trade toolbox to impose more levies and make up for the loss of IEEPA/“Liberation Day” tariffs following the Supreme Court ruling as well as duties that are slated to expire July 24. Mexico and Canada are targeted at the lesser 10% rate (vs. 12.5% that applied to other countries) and, more importantly, USMCA-originating goods are exempted. According to Mexico, the forced-labor tariffs would not affect goods covered by Sec. 232 tariffs (autos, steel and aluminum) and bilateral talks on the roughly 15% of Mexican imports that do not meet USMCA origin rules will be held during the 45-day consultation period. But how USMCA talks evolve will determine the application of these additional tariffs; the formal and seemingly cordial process on the Mexico side contrasts with the lack of progress on U.S.-Canada talks. Failure to renew USMCA adds uncertainty to the potential impact of U.S. tariffs on Mexico and/or Canada.
• Bilateral tensions with Canada: Recent USTR statements maintaining tariffs on USMCA partners described trade problems with Canada as significant. Trump’s rising irritation with Canada over a host of non-trade grievances and animosity toward Prime Minister Mark Carney, in addition to Canada’s posture of strategic patience per the tenet that no deal is better than a bad one means talks are a long way off from concluding. Canada-U.S. Trade Minister Dominic LeBlanc and Canada’s chief trade negotiator Janice Charette’s meeting with Greer June 2 seems to have generated some optimism in Ottawa about USMCA renewal and the application of U.S. sectoral tariffs. LeBlanc described talks with the U.S. as “unfrozen” but a date on the start of formal bilateral negotiations is yet to be announced.
• Indictments of Mexican officials: Washington’s more conciliatory approach to Mexico is largely a response to President Claudia Sheinbaum’s willingness to increase economic and security cooperation. But her ability to acquiesce to Trump’s demands has limits and is being tested by the U.S. indictments of Morena party officials as well as other perceived infringements of Mexican sovereignty (e.g., drone surveillance and strikes against cartels that Sheinbaum said she approved). Extraditing these officials to the U.S. and allowing investigations into the extent of Morena’s – and possibly that of Sheinbaum predecessor and mentor Andrés Manuel López Obrador (AMLO) – involvement with cartels is something domestic political constraints will not permit.

We repeat our core judgement that USMCA talks are highly unlikely to conclude by July 1/Canada Day but may well continue for years, with tariffs remaining at or near current levels.

The additional factor markets should consider is the heightened risk of outright U.S. withdrawal or increased tariffs from a salvo of Truth Social and ambient threats, including likely Trump statements about exiting USMCA in favor a U.S.-Mexico bilateral this year. We believe the anti-Canada zeitgeist within the White House is high and growing, increasing the danger of new trade activism with no warning or economic justification.

Policy Contributing Writers Filipa Jorge and Kevin Nealer are principals of The Scowcroft Group, a Washington, D.C.-based international business advisory firm founded by the late Brent Scowcroft, former National Security Advisor to Presidents George H.W. Bush and Gerald Ford. Its principals generously provide Policy’s regular Letter from Washington and Scowcroft Group Snapshot posts.