The U.

S. government's refusal to extend the terms of the Agreement between the United States, Mexico and Canada (USMCA) could exacerbate trade disputes in North America, further supporting higher U.

S. steel prices.

The USMCA is facing a July 1 deadline to extend the terms agreed upon during Trump's first term six years ago. However, at a virtual meeting of the three countries, Canada and Mexico agreed to extend the agreement, while the United States refrained from approving it.

"The US decision was not completely unexpected, given the administration's repeated statements that it was ready to refrain from extending the agreement. However, this does mark the beginning of a period of heightened uncertainty and could strengthen the negotiating leverage of the United States as discussions continue on the future of the USMCA," said Laura Hodges, member of the European Parliament and U.

S. steel market analyst.

Reducing Article 232 import duties on steel, aluminum, and automobiles was a key goal of both Mexico and Canada during negotiations with the United States.

"While changes to Section 232 tariffs cannot be completely ruled out, the decision not to renew the USMCA in its current form also reduces the likelihood of a reduction in the existing 50% steel tariff," Hodges added.

The main reasons for the refusal to extend the USMCA were the continuing trade deficit and concerns about supply chain security, as well as the desire to strengthen American manufacturing and tighten legislation on rules of origin. In 2025, the U.

S. trade deficit with Canada was about $46 billion, and with Mexico it was $197 billion.

The decision of the US government not to renew the USMCA does not mean the termination of the agreement. Provided that none of the three countries withdraw from the USMCA, the agreement will not expire until July 1, 2036. However, the IOP decision has launched an annual review process, during which key elements can be reviewed. As a result, uncertainty about the future of North American trade has increased after more than three decades of regional integration under the North American Free Trade Agreement (NAFTA) and the USMCA.

During this period, offshore was a major driver of manufacturing growth in North America, especially in Mexico. Now, the uncertainty surrounding the USMCA may force steel consumer companies to postpone or reconsider future investment decisions. For the steel market, this announcement favors price growth.

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