Overview
U.S. and Mexican officials convened in Washington on Tuesday for a second tranche of negotiations aimed at revising aspects of the United States-Mexico-Canada Agreement (USMCA). The talks, held behind closed doors over two days, concentrate on agricultural market access and the Mexican government’s growing role in its energy sector. These sessions follow an initial round of negotiations in Mexico City last month that exposed broad U.S. demands on automotive content rules.
Negotiation context
During the earlier Mexico City talks, U.S. negotiators sought to tighten regional rules for motor vehicle content, proposing that 50% of North American vehicle content be sourced specifically from the United States. That demand, combined with other regional content requirements, would raise the North American threshold to 82%. Canada has not been formally part of these two-country sessions, although Canada’s trade minister, Dominic LeBlanc, has maintained contact with U.S. Trade Representative Jamieson Greer.
President Donald Trump has publicly cast doubt on the future of the three-country trade framework. "I’m not looking to renew it," he said of USMCA last week. "We don’t need anything that Canada has. We don’t need anything that Mexico has, but they need everything that we have. They have to treat us better." It is not clear from available information whether those remarks reflect a negotiating posture or a substantive policy stance, but the president has voiced repeated frustration with the pact he signed in 2020 to replace the 1994 North American Free Trade Agreement - particularly in light of persistent U.S. goods trade deficits with Canada and Mexico.
Timing and potential procedural outcomes
The three countries face a July 1 procedural deadline to decide whether to extend USMCA unchanged or to recommend amendments. Revisions are not expected to be completed by that deadline. Instead, July 1 is anticipated to trigger a 10-year clock that would start the process for potential termination of the agreement, while negotiations continue. Separate from the extension decision, a termination clause exists that allows any member to withdraw from the pact six months after providing written notice.
A further, third round of U.S.-Mexico talks is scheduled to occur in Mexico City during the week of July 20.
Political and economic stakes
Former Texas congressman Kevin Brady, now working as a lobbyist for the trade pact at the law firm Akin Gump, described the task confronting Ambassador Greer as twofold: secure concessions that keep the president engaged with USMCA negotiations while preserving the duty-free structure that supports the North American economy and nearly $1.6 trillion in annual regional trade. "It’s a bit of a Texas two-step," Brady said, noting the dual challenge of negotiating in the U.S. interest and persuading the president to accept the resulting agreement.
Administrations have already altered the trade landscape unilaterally. The president has imposed tariffs on autos, steel and aluminum imported from Mexico and Canada. USTR has indicated those duties will remain in place, though possibly at reduced levels.
Agricultural priorities and concerns
Agriculture groups have urged that any extension of USMCA include a lengthy extension period and specific protections for farm exports. They want the pact extended for another 16 years with continued duty-free treatment for agricultural products, stronger language safeguarding trade in genetically modified (GMO) corn, and improved ethanol access into Mexico. Those requests reflect the importance of Canada and Mexico as markets for U.S. farm goods.
According to U.S. Department of Agriculture figures cited in the talks, Canada and Mexico were the top two markets for U.S. agricultural exports, together accounting for more than $58.6 billion in farm shipments in 2025. The two neighbors represent more than one-third of total U.S. agricultural export volumes globally, a share that has grown as China reduced purchases following earlier U.S. tariffs.
Farm organizations have warned of severe repercussions from any failure to extend the agreement. Minnesota soybean farmer Jamie Beyer, testifying to the House Agriculture Committee, said that termination would be "catastrophic for U.S. agriculture," arguing that entire industries, companies, farmers and families depend on the arrangement for stability. Beyer, who serves on the American Soybean Association executive committee, urged that appropriate improvements be made but that the agreement’s long-term extension must remain beyond doubt.
Despite the agricultural importance of the pact, trade balances vary by product. The United States ran agricultural trade deficits of $13.2 billion with Mexico and $11.1 billion with Canada last year. U.S. producers see specific measures that could reduce deficits. For example, the National Corn Growers Association, represented by Nancy Martinez, has advocated pressing Mexico to allow ethanol blending with gasoline in major cities. Martinez suggested such a policy change could lift annual U.S. ethanol exports to Mexico by around $2 billion.
Energy sector disputes
Energy policy is another central point of contention. U.S. negotiators aim to address long-standing objections to actions by the Mexican government that prioritize state oil producer Pemex and that reduce opportunities for private and foreign energy companies, despite USMCA commitments intended to allow greater U.S. oil investment.
The American Petroleum Institute submitted public comments to USTR criticizing the Mexican government for using protracted dispute procedures within USMCA in ways that advantage Pemex relative to private and foreign oil and gas investors. The trade group suggested that USTR insist on a "rapid response" enforcement mechanism for state-owned enterprise compliance. The proposed mechanism would mirror an existing USMCA tool designed to enforce labor rights at manufacturing facilities by denying trade benefits to noncompliant firms.
Biotech corn and regulatory clarity
A USMCA dispute tied to genetically modified corn produced concessions that helped U.S. corn exporters. Mexico repealed decrees that had banned imports of GMO corn for human and animal consumption; however, Mexico still prohibits the local planting of biotech corn. Martinez said corn growers seek a clear provision preventing Mexico from using non-scientific grounds to restrict trade in GMO corn, which the U.S. exports to Mexico at roughly $5 billion annually.
Outlook
Negotiators now move into the Washington meetings with agriculture and energy topics front and center. The sessions will test whether U.S. negotiators can secure changes that satisfy domestic constituencies while maintaining the trade flows and tariff frameworks underpinning a large share of regional commerce. How Canada’s absence from formal bilateral talks shapes the final outcome remains an open question, as does whether the tone of presidential remarks will influence the negotiation dynamic or reflect tactical positioning.
Contact
For further coverage and updates on the negotiation rounds, stakeholders in agriculture, energy and automotive supply chains are monitoring the scheduled follow-up talks and any formal announcements from USTR and Mexican counterparts.