The USMCA, the free trade agreement between the United States, Mexico and Canada, remains in force. At the joint review on July 1, 2026, the United States declined to confirm a 16-year extension, so the agreement now faces a review every year. Preferential tariffs, rules of origin and customs procedures keep applying while the three countries negotiate.
If your company sells to Mexico, runs a plant there or competes for space in the US market against Mexican and Canadian suppliers, the outcome of this review reaches your costs and your lead times. Below: what the USMCA is, how it differs from NAFTA, what happened at the July review and how an exporter based in Brazil should prepare.
The USMCA (United States-Mexico-Canada Agreement) is the free trade agreement between the United States, Mexico and Canada. It took effect on July 1, 2020, replacing NAFTA, and governs how goods, services and data move across the three borders. In Mexico the same agreement is called T-MEC. In Canada, CUSMA.
Beyond tariffs, the agreement carries enforceable labor provisions designed to protect workers' rights and wages in all three countries. That chapter is back at the center of the table in 2026.
The USMCA kept the backbone of NAFTA, which ran from 1994 to 2020, but changed points that matter in an exporter's daily routine. The main differences, according to fact sheets from the USTR (the Office of the United States Trade Representative):
Topic | NAFTA (1994 to 2020) | USMCA (since 2020) |
Regional content for light vehicles | 62.5% | 75% |
Certification of origin | specific form | self-certification in any format, with a minimum set of data elements |
Digital trade | no dedicated chapter | bans customs duties on electronically transmitted products |
Small and medium-sized enterprises | no dedicated chapter | standalone SME chapter |
Term | open-ended | 16 years, with a joint review in year six |
Because it was the first US trade agreement with a chapter dedicated to SMEs. Canada and Mexico are the two largest export markets for American small businesses, according to the USTR, and border paperwork weighs heaviest on lean teams. Three provisions make a practical difference:
For goods that meet the rules of origin, the agreement generally provides duty-free treatment. That does not stop governments from applying trade remedies or additional tariffs on other legal grounds.
The most recent example comes from Canada. In July 2026, the White House announced an additional 50% tariff on part of Canadian imports. On August 21, the Canadian government suspended bilateral negotiations with the United States and announced matching retaliation. Being "USMCA-originating" lowers the base tariff, but it does not shield a product from new measures.
Keep in mind that the tariff is collected from the importer of record in the destination country, and the cost usually reaches the final price. The article Who pays import tariffs? walks through that mechanism.
Unlike NAFTA, the USMCA has an expiry date. Article 34.7 requires the three countries to hold a "joint review" on the sixth anniversary of entry into force, which fell on July 1, 2026. On that date, each country had to say whether it confirmed extending the agreement for another 16 years.
Mexico and Canada confirmed. The United States did not. In a statement issued the same day, US Trade Representative Jamieson Greer said the country "did not agree to renew the USMCA in its current form" and cited trade deficits with both neighbors.
Yes. The agreement has neither lapsed nor expired. All current rights and obligations, including preferential tariffs, rules of origin, investment protections and dispute settlement, continue to apply exactly as before.
Because the extension was not confirmed, the agreement entered a cycle of annual joint reviews. They repeat until the three countries agree to extend or until expiry on July 1, 2036. The text itself allows the heads of government to confirm an extension in writing at any time, without reopening the whole negotiation.
The United States chose to negotiate on separate bilateral tracks. With Mexico, the calendar looks like this:
Round | When and where | Core topics |
1st | May 28 to 30, 2026, Mexico City | automotive rules of origin, steel, aluminum and economic security |
2nd | June 16 and 17, 2026, Washington | rules of origin for industrial goods, agriculture, labor and environment |
3rd | July 21 to 23, 2026, Mexico City | steel, aluminum, derivatives and value chains |
4th | scheduled for September 2026, Washington | pending issues, with the automotive sector at the center |
Source: USTR and Mexico's Secretaría de Economía statements, May to July 2026.
With Canada, the track stalled. The country joined the July 1 meeting and backed renewal, but on August 21 it broke off talks after the new US tariffs.
Because Brazil is connected to North America through three channels, and each one reacts differently to the review.
The first is Mexico as a customer. In 2025, Brazil exported US$7.7 billion to Mexico and imported US$6.2 billion, according to Comex Stat, the trade database of Brazil's Ministry of Development, Industry, Trade and Services (MDIC). Much of that is industrial: auto parts, engines, machinery, steel and chemicals, inputs that enter Mexican plants whose finished product goes to the United States.
Here is the pressure point. A Brazilian input is "non-originating" under the USMCA. The higher the regional content requirement, the more closely the Mexican buyer has to watch the share of parts from outside the region in the cost of the final product. If the bilateral rounds tighten automotive rules of origin, the Brazilian supplier may face requests to open up cost data, extra documentation or pressure to be replaced.
The second channel is the plant in Mexico. Brazilian companies such as Tupy (Saltillo and Ramos Arizpe) and Marcopolo (Monterrey) produce in Mexico to sell to the United States. For them, every change in rules of origin, labor content or sectoral tariffs changes the math immediately.
The third is competition in the US market. The United States was the second-largest destination for Brazilian exports in 2025, according to MDIC. When a Mexican or Canadian product loses its preference or receives a new tariff, room opens up for the Brazilian supplier. But exporters in Brazil already live with the additional US tariffs on Brazilian goods, explained in the guide on Section 301. The advantage has to be calculated line by line, never assumed.
Two things, and neither comes from the USMCA.
The first is Mexico's tariff reform. A decree published in the Diario Oficial de la Federación in December 2025, in force since January 1, 2026, raised import duties on 1,463 tariff lines for countries with which Mexico has no trade agreement, with rates reaching 50% on some products. The list covers the automotive, textile, apparel, plastics, steel, home appliance, aluminum, toy, furniture, footwear, paper, motorcycle, trailer and glass sectors, according to the Secretaría de Economía.
Brazil has no comprehensive free trade agreement with Mexico. What exists are partial-scope agreements under ALADI, described by Brazil's Siscomex portal:
Exporters of items covered by these agreements keep their preference. Outside the lists, the general tariff applies, and it went up. And there is a detail that catches many companies off guard: the ACE-53 preference is a percentage discount on the general tariff. If the general tariff rises, the discounted amount rises too. Recalculate the cost even for covered items.
The second change is documentation. To use the ACE-53 or ACE-55 preference, the goods must meet the agreement's rule of origin and travel with a certificate of origin in the ALADI format, issued by an authorized entity in Brazil. Without it, the Mexican importer pays the full tariff. Correct classification under the NCM and the HS code, plus a complete commercial invoice, prevent most problems at the border.
Comparing the three markets, this is where a Brazilian exporter stands in September 2026:
Market | Basis of Brazilian access | What changes with the USMCA review |
United States | general tariff plus additional tariffs on Brazilian goods (Section 301) | possible openings where Mexican or Canadian products lose preference |
Mexico | ACE-53 (roughly 800 positions) and ACE-55 (automotive); otherwise, the general tariff raised in 2026 | pressure on Brazilian inputs in supply chains that export to the US |
Canada | no agreement in force; Mercosur and Canada are negotiating a treaty | Canada's push for diversification may speed up the Mercosur talks |
It can, and the timing helps. Negotiations between Mercosur and Canada resumed in October 2025, and the tenth round took place in Toronto from May 25 to 29, 2026, with five chapters moving to the closing stage, according to Brazil's Ministry of Agriculture and Livestock. The Canadian government keeps saying it wants to reduce dependence on the US market, and the August tariffs reinforce that agenda.
For a Brazilian exporter, that means watching two fronts at once: what the United States demands from Mexico and Canada inside the USMCA, and what Canada offers Mercosur outside it. A deal closed in 2026 would open a market that Brazil currently reaches without any tariff preference.
Nothing changed overnight for shipments. But the review stopped being a formality and became a real negotiation, with monthly rounds and a deadline in 2036. Six measures that fit companies of any size:
Yes. The agreement remains fully in force. At the joint review on July 1, 2026, the United States did not confirm a 16-year extension, but that does not end the agreement: preferential tariffs, rules of origin and dispute settlement mechanisms continue to apply.
Because the extension was not confirmed in 2026, Article 34.7 requires the three countries to review the agreement every year. The reviews continue until they confirm an extension or until expiry on July 1, 2036.
On July 1, 2036, unless it is extended. The heads of government of the three countries can confirm a further 16-year extension in writing at any time before then.
No. It is the same agreement under a different name in each country: USMCA in the United States, T-MEC in Mexico and CUSMA in Canada.
No. Brazil reaches Mexico through the ALADI agreements ACE-53 and ACE-55, and has no trade agreement in force with the United States or Canada. Mercosur and Canada are negotiating a free trade treaty, with the tenth round held in May 2026.
Not on its own. Brazilian inputs count as non-originating content. A product made in Mexico with Brazilian parts can qualify if it meets the product-specific rule of origin for its HS code, such as the regional value content threshold or the required tariff shift.
The 2026 review did not end the USMCA. It opened a negotiating period likely to last months, perhaps years, with annual decisions until 2036. In the meantime, the rules you know still apply, and what separates the companies that make the most of this phase from those that suffer through it is current information and documentation in order.
If your company ships regularly to Mexico, the United States or Canada, open a DHL Express Business Account and count on DHL's customs teams to track every change before it reaches your shipment.
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