The U.S. has declined to extend the U.S.-Mexico-Canada Agreement (USMCA) for another 16 years during its first mandatory review. The agreement isn't ending—it remains fully in force, with all current obligations (tariffs, rules of origin, dispute settlement, and the Rapid Response Labor Mechanism) still applicable.
CHRO Global's Take: While no immediate operational changes are necessary, companies should expect continued uncertainty as governments negotiate revisions that could reshape trade, manufacturing, and labor obligations.
What happens next: Since the U.S. declined the 16-year extension, USMCA enters annual joint reviews through 2036 (all three governments could still agree to an extension later). The U.S. plans to use this period to push revisions, focused mainly on trade deficits. A new U.S.-Mexico negotiating round starts later this month; Canada has not yet begun its negotiations.
Employers face growing uncertainty: Existing rules apply for now, but companies with integrated North American operations should watch for potential changes to:
- Automotive rules of origin and regional content requirements
- Sourcing and supply chain decisions
- Customs compliance and tariff planning
- Cross-border investment decisions
- Long-term manufacturing and talent strategy
Major automakers have already warned that stricter content requirements could raise production costs and reduce supply chain certainty.
Labor enforcement remains active: The RRLM still allows the U.S. and Canada to bring facility-specific cases over freedom of association and collective bargaining violations, mostly in Mexico. Since 2021, nearly 50 cases have been filed, making it one of the most active labor enforcement tools in any trade agreement. Employers with Mexican operations or suppliers should keep monitoring labor compliance closely.
