North American trade will be stuck in limbo in 2026. The United States-Mexico-Canada Agreement (USMCA) won't be extended, updated, or killed. It will stagger on as a zombie, keeping businesses and governments guessing while President Donald Trump continues negotiations with America's two largest trading partners.
The agreement is up for its mandated review this year, when the parties can extend it for an additional 16 years. But Trump wants to avoid the constraints of a new trilateral deal so he can keep using bilateral leverage to squeeze economic and political concessions from both countries. Canada already scrapped its digital services tax. Mexico is imposing tariffs on China. Both are cracking down on fentanyl flows. Washington gave up nothing in return. Why lock into an agreement when the current approach keeps delivering for the US president? Neither Canada nor Mexico can afford to walk away. The United States is the destination for roughly 75% of Canadian exports and 80% of Mexican exports. Trump holds most of the cards and he knows it.
The result will be a “zombie USMCA” that is neither fully dead nor alive—and a North American trade zone buffeted by chronic uncertainty.
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