United States-Mexico-Canada Agreement (USMCA)

On March 26, 2025, President Trump issued a Proclamation announcing the imposition of a 25% tariff on imported automobiles set to become effective on April 3, 2025, and certain automotive parts, set to become effective no later than May 3, 2025. These automotive tariffs will follow what the President has dubbed “Liberation Day” (i.e., April 2, 2025), the day new reciprocal and sectoral tariffs are planned to go into effect on a wide range of imports from various countries.[1] 

Just two days after the tariffs on all Mexican and Canadian products became effective, on March 6, President Trump announced amendments to the tariffs against Mexico and Canada “to minimize disruption to the United States automotive industry and automotive workers.” Specifically, the amendments provide that the tariffs would not apply to goods that qualify for preferential treatment under the United States-Mexico-Canada Agreement (USMCA). The amendments also lowered the duty rate for non-qualifying imports of potash from Canada and Mexico. (For background on the tariffs and retaliation, see our earlier article, U.S. Implements New Tariffs on Canada, Mexico, and China.)

From tariffs on dairy and solar products to rules of origin for automobiles, the three parties to the United States-Mexico-Canada Agreement (“USMCA”) have disagreed on a variety of issues since the agreement came into force in 2020. This time, the subject of the dispute is corn, or more specifically, the measures taken by Mexico to ban the import of certain genetically engineered (“GE”) corn and other GE products.  

The United States-Mexico-Canada-Agreement (“USMCA” or the “Agreement”) was formed to promote growth in North American trade in a way that is beneficial to each of the state parties to the Agreement. However, as with any agreement, disputes can and do arise concerning the interpretation of the USMCA and the responsibilities of the state parties. 

On July 6, 2021, the U.S. Government published a notice of proposed rulemaking and request for comments on an amendment to the Code of Federal Regulations (“CFR”) regarding the determination of non-preferential origin for imports from Mexico and Canada: Non-Preferential Origin Determinations for Merchandise Imported from Canada or Mexico for Implementation of the Agreement Between the United States of America, the United Mexican States, and Canada.

Emilio Arteaga is a Jr. Partner at Vazquez Tercero & Zepeda law firm in Mexico City. Torres Law and Vazquez Tercero & Zepeda are member law firms of Alliott Group Alliance and often collaborate on international trade corporate matters involving the United States and Mexico, including USMCA compliance issues.

This article summarizes important developments affecting international trade.

On June 19, 2019, Mexico became the first country to ratify the United States-Mexico-Canada Agreement (USMCA). By a vote of 114 to 4, Mexico’s Senate approved the replacement to the North America Free Trade Agreement, making Mexico the first country to ratify to the new treaty.

The North American Free Trade Agreement (“NAFTA”) has been in effect since January 1, 1994, and more than two decades later, on May 18, 2017, the United States Trade Representative (“Trade Representative”), Robert Lighthizer, notified Congress of the United States' intention to renegotiate NAFTA. The United States commenced renegotiations with Canada and Mexico on August 16, 2017.

This article discusses the potential implications of NAFTA's renegotiation or withdrawal.