USTR: US Won't Rubber Stamp USMCA Renewal

In closed-door meetings with the Senate Finance Committee and House Ways and Means committees Dec. 16 and 17, Greer said, "USTR’s view is that, whatever USMCA’s value to the United States and even North America, the shortcomings are such that a rubberstamp of the Agreement is not in the national interest," according to his prepared opening remarks.

He said USMCA is a clear improvement over NAFTA, and has "been successful to a certain degree."

He said stakeholders' comments show "broad support" for it continuing, though some said it should only do so if the changes they want are achieved.

Some of the successes of USMCA Greer highlighted were that wages for Mexican workers nearly doubled from $2.30/hour in January 2020 to $4.20/hour in September 2025 "at least in part, thanks to the labor reforms required by the Agreement and frequent use of the Rapid Response Mechanism."

He said U.S. exports of goods and services to Canada and Mexico are up 56% since 2020.

He said it's a good thing that Mexico captured about 25% of the reduced trade between the U.S. and China. But he also said the trade deficit in goods with Canada and Mexico is "extremely high," and a shortcoming of the pact.

"Although trade within North America is more conducive to bolstering national security relative to trading with other parts of the world, our large trade deficit reflects offshoring and structural disadvantages," he said.

However, he said the Section 232 action on autos, with its incentives for U.S. production, is starting to address that shortcoming.

The goods deficit with Canada is wholly due to oil imports; in manufactured goods, the U.S. has a surplus with Canada.

Although he said the private Q&A would allow for candor, the USTR posted the opening statement the evening of Dec. 17 to "allow off-Committee Members of Congress, stakeholders, and foreign governments to understand the Administration’s current perspective on the Joint Review."

For the U.S. to want to stay in USMCA, Mexico and Canada must agree to stricter "rules of origin for non-automotive industrial goods to ensure that the benefits of trade in those products flows substantially to the Parties," Greer wrote. He said there should be mechanisms in the pact to penalize production that moves to Mexico or Canada from the U.S. "as the result of regulatory and other arbitrages."

Mexico must change its "policies that promote the use of third-country content and erode U.S. supply chains," he said.

He said that Mexico must address "the impact of imports of Mexican seasonal produce on U.S. growers." The issue of seasonal produce was one that stakeholders disagreed on in comments ahead of the review, he acknowledged. The U.S. dropped its push for changing antidumping rules to cover competition from Mexican imports during Florida's and Georgia's growing seasons during the NAFTA renegotiation.

He said that Canada must provide the market access it promised under USMCA. The issue of Canada's administration of its tariff rate quotas in dairy is politically sensitive in that country. Also, a dispute panel in 2023 approved Canada's TRQ process changes after Canada lost an initial panel decision (see 2311240002).

He said USMCA was not designed "to address the surge of investment from companies domiciled in non-market economies in the region or the effects of industrial overcapacity on the three economies," but praised Mexico for "finalizing a legislative proposal that establishes a mechanism to review inbound investment for national security risks" and for "introducing a legislative proposal that would increase tariffs on over 1,400 products imported into Mexico from non-FTA partner countries, including China." He also said they are changing their export controls regime to more closely align with the U.S.

These three were among a dozen areas that Mexico has acted on in response to U.S. trade diplomacy, and Greer said, "I am hopeful that we will be able to announce the fruits of this 'specific issues' exercise, and progress on counter-cartel and fentanyl collaboration, in short order."

The 25% tariff on Mexican goods that do not meet USMCA rules of origin (and are not subject to a Section 232 tariff) was imposed over fentanyl trafficking and irregular migration. The latter has pretty much ended this year.

Greer only praised Canada for two decisions -- to roll back retaliatory tariffs on U.S. exports and to abandon a digital services tax.

A number of the issues highlighted by USTR fall under customs facilitation, which also was a common theme among witnesses, he said.

He praised Mexico's decision to increase the budget for its single window, its rule change "to make it easier to correct clerical errors in customs declarations without penalty," and streamlining regulations on medical devices and telecommunications equipment. However, he said they need to end "restrictions on Mexican customs brokers that raise costs for U.S. exports crossing the border."

He said Canada needs to fix its "complicated customs registration for Canadian recipients of U.S. exports."

Greer chose a handful of comments to highlight to the committees, including strengthening rules of origin for downstream products containing specialty metals and prohibiting Mexican duty exemption and drawback programs for steel products, though he also acknowledged the National Association of Manufacturers said current rules of origin should remain.

"We received 1,514 comments from a wide range of stakeholders, and my team has worked hard these last few weeks to read and analyze each comment. In their comments, many stakeholders expressed support for the USMCA and many explicitly called for the Agreement to be extended. However, at the same time, virtually all stakeholders also called for some sort of improvement to the Agreement. Some commentators indicated that they supported extension only if certain improvements were made," he said.

"And, of course, for different stakeholders, what constitutes an improvement is a matter of perspective. We have many comments from stakeholders on opposite sides of the same issue."

He told the committees that he understands the members value USMCA, and he understands their concerns, "and the regional and global challenges to our competitiveness."

He concluded, "I want to stress that the success of the Joint Review will depend on a variety of factors, including the ambition of our USMCA partners. In addition, we must achieve outcomes that meet President Trump’s expectations."