Mexico, the US, and Canada face the review of the USMCA

The United States-Mexico-Canada Agreement (USMCA) is at a decisive moment. Multiple disputes, including those subject , agriculture, and labor, will shape the course of North American trade relations in the coming years. The review scheduled for this year will be core topic defining the positions of member countries within the regional bloc. This process involves industrial, regulatory, and political challenges, in a framework by the Trump administration's tariff policy. Mexico faces the challenge balancing its economic sovereignty with the commitments of the treaty.

Since its entrance force in July 2020, as the successor to agreement in 1994, the free trade agreement between Mexico, the United States, and Canada (USMCA) has consolidated North American trade integration. However, it faces structural tensions in energy, agriculture, and labor rights that condition both economic competitiveness and the political relationship between the three countries. With Donald Trump's return to the presidency, adjustments are anticipated that could define regional cooperation and the implementation of domestic policies.

The USMCA (Washington calls it USMCA and Ottawa calls it CUSMA: each partner country partner its acronym first) has shown sustained growth for trilateral trade in the region. Between 2020 and 2025, Mexican exports to the US increased by 34.3%, from $323.476 billion in 2020 to $492.513 billion last year, agreement data . On the other hand, Mexican imports from the US grew by 31% in the same period, from $212.512 billion to $309.799 billion. The Mexican figures vary slightly but reflect Issue similar Issue trend.

Not only has Mexico consolidated its position as the main source of imports from the United States—a position it took from China in 2023—but its trade surplus with its northern neighbor continues to grow, despite Trump's complaints, which largely led him to propose replacing the then NAFTA agreement during his first term. The US trade deficit with Mexico was $182 billion in 2025. The increase in trade between the US and Mexico, in any case, is not only the result of the dynamics made possible by the USMCA, but also due to the US policy of divestment ('de-risking strategy') in China. On the other hand, although Mexico has increased its trade with Asia, the flows do not indicate that Chinese products are significantly using Mexican soil to enter the US, avoiding tariffs and benefiting from the USMCA, as the Trump administration has sometimes suggested.

Review process

The first meeting of committee to review the treaty is scheduled for July 1. Delegations from the three countries have already held work meetings work the end of last year to prepare for the negotiations. As for the process, if the treaty is not renewed in 2026, it will remain in force for another ten years, with annual reviews, ending in 2036, unless renewal for an additional 16 years is agreed upon during that period. If consensus is reached now, the next review would be in 2032, to extend the agreement 2048.

The revision of the treaty aims both to take advantage of new opportunities that have arisen in recent years and to overcome some of the problems that have been identified. Six strategic sectors have been identified for promotion during the revision of the USMCA: automotive, aerospace, electronics, pharmaceuticals, chemicals, and semiconductors. Automotive exports grew 35% from 2019 to 2024, electronics 48%, and pharmaceuticals 88%. Strengthening these industries is essential for development and is a core topic the effective review of disputes under the USMCA.

In any case, other areas may take center stage, especially those that have caused friction since the establishment of framework new framework in 2020. These operational conflicts were already apparent halfway through this period, in 2023, when complaints had already arisen from the US about Mexican protectionism in its energy policy, as well as its failure to comply with the labor and environmental standards of its other two partners.

Disputes over energy policy

Certainly, one of the most contentious points in the framework has been Mexican energy policy. Since 2020, the United States has requested formal consultations under the USMCA, questioning the reforms and policies implemented by Mexico in its energy sector, especially those affecting private investment and the competitiveness of US companies in the country. These consultations not only reflect trade tensions, but also growing scrutiny of how Mexico balances energy sovereignty and international commitments.

Washington has warned of sanctions if the Mexican government does not modify its energy policy, opening the sector to skill and foreign skill . The US government maintains that the Mexican government's prioritization of Pemex or the CFE violates the principles of non-discrimination and free skill in the USMCA, which harms US companies and investment. Washington argues that by granting advantages to state-owned companies, Mexico is restricting competition in the Mexican market.

The Sheinbaum administration has been defending its sovereign right to regulate the energy sector. At the same time, constitutional reforms have been consolidated that eliminate independent regulators and integrate them into the administrative office , along with decrees that now require private companies to partner with PEMEX and the gasoline price cap that has been consolidated, which hinders the competitiveness of private importers.

The "ratchet clause" in Chapter 14 of the USMCA prevents setbacks in the opening of sectors previously open to private participation and will be core topic this year's review, in which the United States seeks to strengthen guarantees for its investors in Mexico.

Equally important in subject is article , which recognizes direct control and inalienable ownership of hydrocarbons. The parties retain sovereign rights to regulate energy matters in accordance with their national constitutions.

On the other hand, chapters 8 and 22 of the treaty, which regulate state-owned enterprises and skill and seek to guarantee certainty and fairness for investment and trade in energy, are a fundamental aspect of the current disputes.

On the one hand, there is a risk of sanctions or adjustments that limit Mexico's ability to implement its domestic diary , especially in the context of promoting state-owned companies. On the other hand, US pressure may act as a catalyst for reforms that improve the sector's transparency and efficiency, aligning it with international standards and facilitating the attraction of investment. Energy disputes have already created uncertainty in investment projects.

The result these disputes will define the balance between Mexico's energy sovereignty and its trade commitments.

Agriculture and genetically modified corn

Agriculture is another source of tension. Since the treaty came into force, the United States has questioned Mexico's restrictions on imports of certain crops, which has caused both commercial and political friction. This has direct implications for food security, the competitiveness of Mexican producers, and the stability of local markets. The government of Andrés Manuel López Obrador implemented a decree in 2023 that banned the importation of genetically modified corn, with the aim of promote country's native varieties and achieving greater food self-sufficiency. The ban created tensions with the United States, Mexico's largest provider genetically modified corn.

In December 2024, a USMCA dispute resolution panel ruled in favor of the United States, finding that Mexico's restrictions lacked scientific basis. Mexico reversed the ban, reopening imports of genetically modified corn. The decision, announced on February 5, 2025, sparked a discussion food sovereignty and the future of native corn.

Balance and projection

The Mexico-United States relationship remains asymmetrical: US pressure on strategic sectors reflects its economic and political weight. On the other hand, Mexico's internal challenges, including energy regulation and agricultural competitiveness, condition its negotiating capacity and performance within the framework treaty.

The management these disputes will largely determine the sustainability and effectiveness of the USMCA. The way in which Mexico adjusts its internal policies and negotiates revisions could strengthen its regional position and increase investor confidence or, conversely, limit opportunities and power in trade negotiations. Political volatility in the United States, especially surrounding the new administration, adds a Degree uncertainty that Mexican decision-makers must carefully consider.

Additionally, the convergence of trilateral interests with Canada will be crucial to resolving disputes and maintaining the stability of the trade bloc. Trilateral cooperation will be a determining factor in ensuring that USMCA rules are complied with and that regulatory adjustments do not cause significant distortions.