U.S., Canada, Mexico open talks to renew North American trade pact

The United States, Canada, and Mexico began talks Wednesday to renew the U.S.-Mexico-Canada Agreement, the regional trade pact that replaced NAFTA in 2020. The agreement requires renewal every six years. Officials can extend it unchanged for another 16 years or continue negotiations until 2036.

U.S. seeks higher North American content rules The United States is pressing for an increase in the percentage of automotive parts that must originate in North America to qualify for duty-free treatment. Current rules set the threshold at 75 percent.

The United States also wants a new requirement that 50 percent of vehicles be produced inside the United States. Neither Canada nor Mexico currently receives a guaranteed production share.

Canada remains outside initial talks The United States and Mexico have held bilateral discussions. Canada has not yet joined the formal talks. Any party may withdraw from the agreement with six months’ notice. President Trump stated in June that he was “not looking to renew” the pact.

Businesses seek tariff stability Companies that rely on cross-border supply chains say they want clearer, more stable tariff rules. One importer of Mexican spirits reported paying $105,000 in unexpected duties last year after a temporary 25 percent tariff was applied and later reversed.

A California firm selling assistive grips said its products lost duty-free status under current origin rules because it sources silicone from Asia.