Washington Says Canada Has Offered ‘No Concessions’ as Mexico Pulls Ahead in CUSMA Talks

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North America’s trade negotiations have developed an uneven rhythm. U.S. Trade Representative Jamieson Greer says Mexico has been “quite pragmatic” through two formal rounds, while Canada’s weekly contacts with Washington have produced “no concessions” and no formal CUSMA negotiations. The contrast is politically sharp but economically complicated. Mexico is moving faster while confronting demands aimed at a U.S. goods deficit that reached $197 billion in 2025, and Canada is holding back while seeking relief from sectoral tariffs. With CUSMA still legally in force and a third U.S.-Mexico round scheduled for the week of July 20, the immediate question is not whether continental trade will stop overnight. It is whether the negotiating agenda will be substantially shaped before Ottawa fully enters the room.

Mexico Is Already in the Negotiating Room

Mexico has established the clearest formal track with Washington. U.S. and Mexican officials completed an initial negotiating round in Mexico City in late May and a second round in Washington from June 15 to 17. Those meetings went well beyond ceremonial contact. The two sides discussed rules of origin for industrial goods, economic security, agriculture, labour, the environment, steel, aluminum and automobiles. They also backed work on a committee intended to improve regulatory compatibility in sectors covered by CUSMA. A third round is scheduled in Mexico City during the week of July 20, giving Mexican negotiators another opportunity to turn broad concepts into possible text or enforceable commitments.

Canada’s channel looks different. Greer says he speaks with Canadian counterparts every week, yet Washington has not begun formal negotiations with Ottawa over CUSMA’s future. That distinction matters because regular calls can clarify positions, but formal rounds create agendas, working groups and negotiating records. Mexico is therefore ahead in process, not necessarily in outcome. It has not been promised tariff relief or an easy renewal. Still, being in the room earlier allows Mexico to learn which U.S. demands are flexible, which are presidential priorities and which could eventually become the baseline presented to Canada.

What Washington Means by “No Concessions”

Greer’s language was designed to draw a hard line between communication and movement. He acknowledged that American and Canadian officials meet frequently, but said those conversations have not produced the concessions sought by President Donald Trump. In Washington’s framing, describing existing contact is not evidence of progress. The message also raises the negotiating bar: Canada will not receive public credit merely for keeping dialogue open. It will be judged on whether Ottawa changes a policy, accepts a new trade rule or offers something that the administration can present as a measurable American gain.

That position is especially striking because Canada has already altered policies criticized by Washington. Ottawa announced in June 2025 that it would rescind its digital services tax, halt the planned collection and use the move to advance broader negotiations with the United States. Greer also cited Canadian movement on online streaming regulation as positive. Yet he declined to treat either step as a fresh CUSMA concession. From Canada’s perspective, that creates a difficult sequence: measures taken earlier to reduce friction may no longer count as bargaining chips. From Washington’s perspective, those changes removed irritants but did not answer current demands involving trade deficits, tariffs, market access and North American content.

Mexico’s Pragmatism Comes With a High Price

Mexico may be receiving warmer words, but it is also carrying the larger target. U.S. Census Bureau data show that the American goods deficit with Mexico reached roughly $197 billion in 2025, up from about $168.6 billion in 2024. Greer called that imbalance structural and said the administration has a mandate to bring it under control, potentially through tariffs, quotas or another mechanism. Washington wants to do that without unnecessarily breaking supply chains, yet it also wants to encourage more production to move into the United States. That is not a small adjustment to an agreement built around regional integration.

Mexico’s incentive to keep negotiations moving is powerful. More than 80% of Mexican exports went to the United States in 2024, making access to the American market central to factories, logistics networks and employment across the country. Pragmatism, in this setting, does not necessarily mean surrender. It can mean testing U.S. proposals early, protecting high-value sectors and trading concessions in one area for certainty in another. Mexico is talking about autos, steel, aluminum, industrial goods and economic security because those are precisely the areas where a poorly designed compromise could affect thousands of suppliers. Its procedural lead therefore comes with greater immediate exposure.

Canada Is Defending a Different Set of Red Lines

Canada’s public posture has been more resistant. Prime Minister Mark Carney has said the country is not a supplicant and will not allow Washington to dictate the terms of the review. Trade Minister Dominic LeBlanc has simultaneously reaffirmed Canada’s support for renewing CUSMA, while insisting that substantive discussions must address U.S. sectoral tariffs on Canadian steel, aluminum, autos and lumber. That combination explains some of Ottawa’s caution. Entering formal talks without clarity on tariff relief could leave Canada negotiating permanent rule changes while temporary or unilateral trade barriers remain in place.

The stakes extend far beyond diplomatic optics. Canada and the United States exchanged about C$3.5 billion in goods and services per day in 2025, while more than 75% of Canadian exports went to the U.S. in 2024. A machine shop in southern Ontario, a lumber producer in British Columbia or an energy supplier in Alberta experiences the relationship through orders, delivery schedules and investment decisions, not communiqués. Ottawa also has leverage through energy, minerals, manufacturing capacity and deep U.S. investment ties. The challenge is timing: holding firm may preserve bargaining power, but a prolonged absence from formal negotiations gives Mexico and Washington more time to shape rules that could eventually affect all three partners.

Autos Are Becoming the Hardest Test

The auto sector shows why the talks are so difficult. CUSMA currently requires 75% of a vehicle’s content to be made in North America to qualify for preferential treatment, along with a labour-value rule requiring 40% to 45% of auto content to be produced by workers earning at least US$16 an hour. Washington has proposed going further by requiring 50% of the value of North American-built vehicles to originate specifically in the United States. That would shift the agreement away from a regional threshold toward a national one and could force automakers to recalculate sourcing for engines, electronics, steel, seats and other components.

The human reality is that an assembled vehicle can represent work performed in all three countries. Parts may cross borders several times before reaching a showroom, while a rule change made in Washington can determine whether a Canadian plant receives the next model or whether a Mexican supplier wins a contract. Canada’s trade minister and chief negotiator recently met representatives from both the Canadian Vehicle Manufacturers’ Association and the American Automotive Policy Council, an illustration of how closely the industries are linked. Tighter origin rules could reduce Asian content and encourage North American investment, as Washington intends. They could also raise compliance costs, create bottlenecks or make some vehicles ineligible for preferential treatment if the transition is too abrupt.

The Deficit Numbers Tell Two Different Stories

Washington’s deficit argument is much stronger numerically against Mexico than against Canada. The U.S. goods deficit with Mexico climbed by about $28 billion, or 17%, to $197 billion in 2025. The deficit with Canada moved in the opposite direction, falling by $12.9 billion, or 21%, to $48.3 billion. Greer nevertheless grouped both relationships inside the administration’s broader effort to reduce deficits. That political framing helps explain why Canada is being asked for movement even though its bilateral figure is smaller and declined during the latest full year.

The composition of the Canadian balance is also important. The U.S. deficit with Canada is largely driven by oil imports. Earlier Canadian government analysis found that the 2024 merchandise deficit was entirely attributable to energy; without energy, the United States recorded a merchandise surplus with Canada. That does not make every Canadian trade practice immune from criticism, but it complicates the idea that the headline deficit alone proves an unfair relationship. American refineries and consumers buy Canadian energy because of geography, infrastructure and demand. Canada’s negotiators will likely emphasize that distinction, while Washington continues to use the overall balance as a visible measure of whether a revised arrangement delivers more production at home.

CUSMA Is Not Expiring Now

The refusal to renew CUSMA on July 1 did not terminate it. Under Article 34.7, the agreement began with a 16-year term after entering into force on July 1, 2020. Because all three governments did not confirm an extension at the six-year review, the commission must now meet annually for the remainder of the term. The countries can still agree at any point before 2036 to extend CUSMA for another 16 years. This mechanism was designed to create recurring pressure for review without causing the agreement to disappear immediately after one missed renewal date.

Withdrawal is a separate legal route. Article 34.6 allows a country to leave after providing written notice, with withdrawal taking effect six months later; the agreement would remain in force for the other parties. No such step is required merely because the 2026 review ended without unanimous renewal. That difference matters to businesses signing contracts, choosing factory locations or planning cross-border shipments. Preferential trade rules remain available while negotiations continue, although uncertainty can still carry a cost. Statistics Canada found that 55.1% of businesses exporting to the United States expected U.S. tariffs to hurt them, while 16.5% planned to delay major investments. Legal continuity does not automatically create commercial confidence.

The Next Breakthrough May Be Political

Greer suggested that the Canadian impasse may ultimately require a direct understanding between Trump and Carney. That assessment implies the remaining gap is not purely technical. Negotiators can compare tariff schedules, origin formulas and regulatory language, but they cannot independently settle the political question of what each leader must be able to claim at home. Trump wants visible gains tied to deficits, domestic production and tighter sourcing. Carney has framed the negotiation around sovereignty, mutual benefit and resistance to one-sided demands. A leader-level understanding could give officials the authority to package compromises that currently look unacceptable in isolation.

Mexico’s head start increases the pressure, but it should not be mistaken for a completed victory. Its negotiators still face possible quotas, tariffs and rules intended to redirect supply chains toward the United States. Canada, meanwhile, retains leverage through a trading relationship worth billions of dollars each day and through sectors Washington relies on, including energy and industrial inputs. The most plausible outcome is not a simple race with one winner. It is a three-country bargain assembled at different speeds. For Ottawa, the risk is that waiting too long allows others to define the menu. The opportunity is to enter formal talks with clearer red lines, a stronger case on energy-driven trade and a package capable of producing reciprocal movement rather than concessions in only one direction.

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