All deadlines are to be met and the Mexico-United States-Canada Trade Agreement (known as USMCA, CUSMA or TMEC in each country) is entering the review process.
According to the provisions stated when the USMCA became a reality, a review process is needed every five years. This is in principle okay, since international trade, economic policies and national priorities of the members change and adjustment seems necessary. Yet, if it was not for the trade war that the Donald Trump administration leads against most U.S. partners, especially those with which a trade deficit prevails, one might expect a smooth review.
Apart from that, President Donald Trump has abandoned compartmentalization. Previous administrations favored various negotiations, separating trade from security, migration and border issues. Instead, the Trump administration mixes topics making connections among then which somehow poisons the agendas with Mexico and Canada. Even non-trade issues are being included by the Trump administration in the menu. To begin with, Trump has labeled Mexican cartels as terrorists, opening the door to possible punitive actions, despite rejection of Mexico's President, Claudia Sheinbaum. Under Trump, Mexico has been accused of not “doing enough” to stop the flows of drugs into the US, specifically fentanyl.
Massive deportations plus a tax on remittances have hit hard on Mexico. The US-Mexican border has been militarized and important increases of the American military budget for 2026 will go directly to finance military actions in that area. To make things worse, the 1944 Water Agreement between Mexico and the US, which governs the allocation and management of the Colorado River, the Tijuana River and the Rio Grande is experiencing problems due to droughts and the consequences of climate change. Trump accused Mexico of not “paying the water” the country owns to the U.S.. Thus, opportunities to update the 1944 treaty are limited.
Canada is not in a better position than Mexico. Not only a very large clandestine fentanyl laboratory in Canada was identified by the US administration: Trump has insisted on proposing that Canada may avoid tariffs in exchange from becoming the 51st state of the American Union. After the Canadian elections, the new prime minister, Mark Carney, met with Trump at the Oval Office, where he was ambushed by Trump's narrative. This made people believed is not a good idea to meet with the controversial Republican despite the need for common ground on the way the USMCA is working. Trump blames Canada for not assuming responsibilities on security matters such as the military budget.
Worse: relations between Mexico and Canada are also under heavy stress. Although Sheinbaum got together with former Primer Minister Trudeau in 2024, and later with his successor, Mark Carney, key issues remain unsolved. One is the visas Canada imposed on Mexican tourists on Feb. 29, 2024. Another one is Canadian mining companies operating in Mexico charged with pollution, threats and deaths of environmental leaders, and accusations by Mexican activists, civil society groups and indigenous populations against companies such as Blackfire Exploration, Altaley Mining and others. It is important to underline that the previous Lopez Obrador administration introduced new rules for mining in Mexico, and Canadian companies have complained. Several scandals involving Canadian mining companies have happened throughout the 21st century and the issue was prominent at conversations between Mexico’s Claudia Sheinbaum and Canada’s Mark Carney during the prime minister official visit to Mexico some days ago. Carney trying to avoid conflicts of interest on the issue asked the Mexican Government for “a list” of Canadian companies not complying with environmental provisions. Yet, the feeling is that something is broken in Mexico-Ottawa relations.
With this political framework in mind, the USMCA review process anticipates clashes between the three countries. One common concern may be China, a major trade partner of the three North American partners without a free trade agreement with any of them. Tariffs against Chinese products have been imposed by the Trump administration, Canada and Mexico. Recently Sheinbaum announced a 50 percent tariff against Chinese cars in compliance with Trump pressures. South Korean cars are also hit by this decision. Similar actions were taken by Canada. Both the U.S. and Canada were counter-sanctioned by China. The reaction of Beijing against Mexico may be similar. Beyond China there seems to be little room for cooperation between Mexico, the U.S. and Canada under USMCA. Not even the forthcoming trinational World Cup in 2026 seems to ease tensions and coordination seems absent.
Whether the USMCA faces brain death, remains to be seen but so far, contentious issues such as labor violations of workers' rights in Mexico like freedom of association and collective bargaining have been denied by Mexican authorities. Under the USMCA Rapid Response Labor Mechanism (RRLM), the US Department of Labor can request an investigation into these violations, potentially leading to trade penalties if allegations are substantiated. Article 23 of the USMCA includes provisions aimed at protecting Mexican workers rights so that the so-called “social dumping” or “labor dumping” does not distort labor conditions in the US or even Canada by lowering standards.
When the USMCA came into force, a year later (2021), only two cases led to the use of the RRLM and Mexico somehow was able to win both. But as of May 2024, the RRLM was invoked 23 times. To many this shows that article 23 of USMCA that contains provisions on labor issues, has led trade unions in Mexico to use it as a tool denouncing various types of abuses by companies against workers’ rights. Yet, the original plan of Donald Trump, who created the USMCA, was to include labor issues in the agreement so potential violations by Mexico may justify the return of manufacturers to the US. In this respect, Trump’s idea of promoting employment “at home, not abroad” as part of his Make America Great Again and America First rhetoric, explains the sense of labor provisions in USMCA. Most labor cases raised by Washington favored Mexico, until August 2025 when the US won the first case where the RRLM determined that there had been a denial of trade union and collective bargaining rights at the Atento Services call center in Hidalgo, Mexico. The victory was achieved thanks to the organized struggle of the workers and the support of Mexican Telephone Operators Trade Union together with the National Workers’ Union (UNT), and marks a precedent of enormous importance for the Mexican working class. Strangely, the Mexican president rejected the RRLM decision by arguing that Mexican authorities investigations did not find any irregular action by the Atento Services call center and suggested interference on internal affairs of the country by foreign trade unions and authorities.
Nevertheless this case is relevant since it shows that beyond controversies in the manufacturing sector, the RRLM is already ruling on domestic labor policies in Mexico. One may remember that if Mexico does not comply with the ruling of RRLM, then it may be submitted to sanctions.
On the Mexican-Canadian front, mining is the most contentious issue. 75 percent of mining companies operating in Mexico are Canadian and many of them have faced accusations of pollution, labor practices that violate the human rights of workers and indigenous groups, and even the death of environmental activists. Open pit-mines are deteriorating ecosystems and contributing to health problems to communities. And yes, even though Mexico needs foreign investment in this and other sectors, many believe the country is paying a very high prize by allowing mining activities forbidden in Canada due to their environmental impact.
Trump’s tariffs against Mexico and Canada have hurt trade not so much since most of it is still exempted from these sanctions. This is the primary reason for Carney to travel to Mexico and getting together with Sheinbaum. Still, there is a big difference between now and the times when the TMEC negotiations developed in 2017-2020. At that time, Mexico and Canada joined forces during the negotiations, although at the end there was an effort from the first Trump administration to negotiate individually and it was announced a Mexico-US agreement “in principle” and Canada was invited to join. Ottawa felt Mexico did not honored the initial “alliance” approach and it joined the USMCA. From that moment, it was clear Trump did not want a trilateral free trade agreement where Mexico and Canada could join efforts against US interests.
Today, Mexico and Canada are not close allies, and instead they are very vulnerable to Trump’s decisions. Trade dependence on the US market does not help. Trade diversification is out of the question for Mexico and Canada, and protectionism is progressing fast in the world. Nearshoring was probably a good idea before, not today, since Trump wants companies operating at home, not abroad.
The idea of trading blocks, with the European Union, the USMCA and ASEAN and similar arrangements in Asia as leaders, is facing a hard time. Even the European Union has proposed a new institution to substitute a nearly defunct World Trade Organization (WTO), a clear victim of Trump’s tariffs and protectionism.
This is the context in which the review process of the USMCA is taking place. Let us hope for the best.
Editor’s Note: The above guest column was penned by María Cristina Rosas, a professor and researcher in the faculty of political and social sciences at the National Autonomous University of Mexico in Mexico City. The column appears in The Rio Grande Guardian International News Service with the permission of the author. Rosas can be reached via email at: mcrosas@prodigy.net.mx
