U.S. will not extend North American trade deal for 16 years

The United States confirmed it will not extend the USMCA trade agreement for another 16 years. Officials stopped short of withdrawal or other dramatic steps. The decision comes after months of preparation by policymakers and businesses for potential conflict over the pact's future. The ongoing war with Iran shifted attention away from the agreement.

Background on the agreement The USMCA governs trade among the United States, Canada and Mexico. Earlier this year, concerns arose that the United States might use the renewal window to confront Canada and Mexico. The United States has begun formal talks with Mexico and remains in contact with Canadian officials. Annual reviews and diplomacy have replaced earlier expectations of confrontation.

Next steps The decision starts a 10-year countdown.

If no extension is agreed by then, the agreement will expire. Prime Minister Mark Carney said Canada will not rush to sign a bad agreement but is ready to make a deal if the right one arises. Canada's trade minister said Ottawa's focus is on discussions over current U.S. tariffs on steel, aluminum, autos and lumber.