On June 10, President Trump told reporters he is “not looking to renew” the Canada-U.S.-Mexico Agreement, three weeks before the pending July 1 review deadline. The statement dominated headlines at this week’s Canada-U.S summit in Toronto, where Prime Minister Carney and U.S. Ambassador Hoekstra were both pressed on what comes next.
But Trump’s comments don’t change the legal reality of CUSMA, which is less dramatic than the headlines suggest.
Will CUSMA terminate on July 1?
No. Under the agreement’s own terms, the July 1 deadline is an opportunity to extend the deal for another 16 years, not a termination date. If the U.S. declines a clean extension, CUSMA shifts to annual reviews while remaining in force until 2036. Customs procedures, rules of origin, and preferential tariff treatment all continue to apply. Mexican President Claudia Sheinbaum said as recently as June 11 that she believes the agreement will be renewed.
The review process will create an extended period of policy uncertainty, which carries economic cost.
Canada’s GDP contracted in three of the last four quarters, business investment has stalled, and the Oshawa General Motors plant laid off over 1,000 workers earlier this year. Those pressures stem largely from existing Section 232 sectoral tariffs on autos, steel, and aluminum, tariffs that will continue regardless of what happens on July 1.
Canada-U.S. Trade Minister Dominic LeBlanc met with U.S. Trade Representative Jamieson Greer in Washington last week, and the two are scheduled to meet again at the G7. Talks are expected to run well into 2027, with rules of origin, forced labour compliance, and tariff relief all on the table.
Moving Forward
For now, businesses with cross-border operations should continue under the assumption that CUSMA is in effect. Where to focus:
- Confirm your products still qualify for CUSMA preferential treatment and that your supplier declarations and origin documentation are current
- Assess your exposure in sectors already under tariff pressure, particularly steel, aluminum, and automotive
- Understand what a tariff increase would cost your business, so you are prepared to act rather than react if conditions change
- Start identifying alternative suppliers or markets now, given that any of the three countries can withdraw from CUSMA with six months’ written notice
CUSMA is not going away on July 1, and businesses that prepare for a range of scenarios, including prolonged ongoing tariffs and trade disruptions, will be better positioned to adapt and maintain competitiveness.
Questions about how this affects your operations? Contact Peacock Tariff Consulting for a customized assessment of the potential impacts on your business and the steps you can take to prepare.
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