After a year of empty promises and false hopes by the Canadian government to secure a trade deal with the US, despite numerous deadlines, including the final one today, July 1, 2026, the US has decided not to renew the USMCA, which will now default to annual reviews, triggering more uncertainty for Canada.
The Office of the United States Trade Representative has released the following statement:
“July 01, 2026
WASHINGTON – The Agreement between the United States of America, the United Mexican States, and Canada (USMCA or “Agreement”) requires the USMCA Free Trade Commission, composed of government representatives of each Party, to conduct a joint review of the Agreement on July 1, 2026. In accordance with the Agreement, the United States, Mexico, and Canada met virtually today to discuss the operation of the USMCA. The United States did not agree to renew the USMCA in its current form. As a result, the USMCA is not renewed. The United States will continue to engage with Mexico and Canada to address the Agreement’s shortcomings and our trade deficits with these countries. However, the Agreement remains in force pending resolution of these issues or until the Agreement’s termination. As previously announced, the United States will meet with Mexico the week of July 20 for a third round of bilateral negotiations related to the USMCA joint review.”
The US still takes roughly 75 percent of Canadian goods exports. That level of dependency creates massive asymmetry. When Washington keeps the agreement in a permanent state of review and renegotiation, Canadian businesses face chronic uncertainty on rules of origin, tariffs, investment, and supply chains. Long-term planning, plant expansions, and cross-border integration all get harder and more expensive. Markets price in that risk immediately.
Yes, US industries will flood DC with lobbyists if disruption looks real and that’s helpful. But those same industries are also the ones pushing for updates that usually mean more concessions from the smaller partner. The leverage is overwhelmingly one-sided. Canada and Mexico are far more exposed than the US economy as a whole.
If any future administration can simply reopen or threaten the deal again, we never actually escape the negotiation treadmill. Stability becomes the exception, not the baseline.
Interestingly, as per the US announcement, Mexico is set for a third round of bilateral negotiations on July 20 while Canada sits idle.
For Canada, USMCA is not just another trade deal. It’s the foundation of our economic relationship with our largest, by far, trading partner. Predictable, rules-based access matters enormously when three-quarters of our exports go to one market. More negotiations and more uncertainty, even without collapse, still carries real costs in delayed investment, higher risk premiums, and lost opportunities.
Canadian leaders tout success in achieving a 10% increase in trade with countries like France valued at $1.2B while the US represents almost $720B (imports and exports) annually.
As we have maintained since April 2025, the Canadian economy would gain significant stability from a robust trade agreement with its largest trading partner, provided the government can overcome its ineffective negotiation efforts.
While it should have been a clean long-term deal, we now face managed but perpetual uncertainty. For Canada, that is far from benign.
Read the history of these events here:
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Luke Dalinda, Realtor. Royal LePage Real Estate Services Ltd., Brokerage.
View all current and past Palace Place listings for sale here.