Washington has formally opened the next phase of the fight over North American free trade. The Office of the U.S. Trade Representative is asking businesses, workers, farmers, trade groups and other interested parties to say how CUSMA should be changed before the 2027 annual joint review. Written comments are due January 12, 2027, and a public hearing will follow.
This is happening because the United States declined to extend the agreement during its first six-year review on July 1, 2026. CUSMA has not disappeared—it remains in force—but the decision pushed Canada, the United States and Mexico into annual reviews until all three governments agree to a new 16-year extension or the agreement eventually reaches its 2036 termination date. That turns what was supposed to be a periodic review into an ongoing negotiation.
Washington Has Started the 2027 Process
The formal machinery is now moving. USTR announced the new consultation process on October 2, and the notice was published in the Federal Register on October 5. Interested parties have until 11:59 p.m. Eastern Time on January 12, 2027, to submit written comments. Those wishing to testify at the eventual public hearing face the same deadline to request an appearance and provide a summary of what they intend to say. USTR has not yet announced the hearing date or location.
That may sound bureaucratic, but these consultations give industries a chance to put specific grievances directly into Washington’s negotiating pipeline. Automakers can argue about regional content requirements. Farmers can press for additional Canadian market access. Manufacturers can push for tighter controls on goods or components entering North America from non-market economies. Technology companies can challenge regulations they consider discriminatory. Unions and small businesses can make competing cases about whether existing rules protect them or impose unnecessary costs. The submissions do not automatically become U.S. negotiating demands, but they give USTR a detailed map of what domestic constituencies want addressed before officials return to the negotiating table.
Why There Is Another Review So Soon
The unusual timing comes from one of CUSMA’s most important—and now most consequential—provisions. When the agreement entered into force on July 1, 2020, it was given a 16-year term ending in 2036. Article 34.7 required the three countries to conduct their first joint review six years later. If all three governments had agreed to extend the deal, another 16 years would have been added and the next formal extension review would have been years away.
Instead, the United States declined to renew CUSMA in its current form on July 1, 2026. That decision did not amount to withdrawal. Washington explicitly said the agreement remains in force while negotiations continue. The treaty text then activates a different timetable: a joint review must be held every year until all three governments confirm that they want the extension or the agreement reaches its expiry date. Importantly, Canada, Mexico and the United States do not have to wait until 2036 to resolve the issue. They can agree to the 16-year extension during this annual-review period, which means the 2027 process is another opportunity to strike a deal rather than simply another step toward expiration.
Washington Is Asking for a Very Broad Wish List
USTR has deliberately left the consultation wide open. The Federal Register notice asks for views on virtually any aspect of CUSMA’s operation or implementation, alleged compliance problems and specific actions the United States should propose at the next review. It also asks whether the agreement is encouraging investment that improves American competitiveness, productivity and technological leadership. Another category focuses on North American economic security and cooperation against the policies and practices of non-market economies.
That wording matters because it gives Washington room to discuss much more than traditional tariff rates. A company could ask for a change in customs administration. An industry association could argue that rules of origin need to be tightened. A technology company could target a Canadian regulation. A manufacturer could request stronger measures against transshipment through Canada or Mexico. At the other end of the spectrum, businesses dependent on integrated continental supply chains can argue against changes that make compliance more expensive. USTR will also hold a public hearing, giving stakeholders another venue to make those arguments. In practical terms, the consultation is where dozens of narrow commercial disputes can begin transforming into a broader negotiating agenda.
Autos and Rules of Origin Look Set for Another Fight
Few sectors have more at stake than automotive manufacturing. U.S. Trade Representative Jamieson Greer told the Senate Finance Committee in July that some of the harder CUSMA questions—including stricter rules of origin—would likely take longer to negotiate and spill into 2027. He specifically tied potential automotive changes to Washington’s goal of encouraging more production in the United States and North America. The administration’s 2026 trade agenda separately called for stronger rules of origin across important industries and stronger measures against transshipment and offshoring.
The existing auto rules are already substantially tougher than those under NAFTA. Passenger vehicles and light trucks generally face a 75% regional-value-content requirement under CUSMA, alongside additional requirements involving high-wage production, core parts and North American steel and aluminum procurement. Those rules were intended to push more value into regional supply chains, but Washington is signalling that it believes further tightening may be necessary. The issue is receiving another layer of scrutiny at the U.S. International Trade Commission, which is preparing its next congressionally required study of CUSMA automotive rules. A USITC hearing is scheduled for October 14, 2026, with the resulting report due by July 1, 2027—the same period in which the next joint review will take place.
Dairy, Digital Rules and Provincial Measures Are Still in U.S. Sights
Canada already has a good idea of several subjects Washington may bring back to the table. The Trump administration’s 2026 trade-policy agenda accused Canada of failing to meet U.S. expectations regarding CUSMA dairy market access and criticized Canadian digital regulations, including the Online Streaming Act. Canadian government briefing material has also identified U.S. concerns involving the Online News Act, provincial treatment of American alcoholic beverages, procurement practices, customs procedures and other regulatory barriers.
These disputes have moved well beyond technical discussions. Washington imposed additional Section 338 trade measures against Canada in July, including actions targeting motor vehicles, alcoholic beverages and dairy, and USTR announced further restrictions in September as the bilateral dispute intensified. Canada, meanwhile, has repeatedly described U.S. sectoral tariffs as unjustified and has insisted that its own interests must be defended. Dairy is especially politically sensitive: Ottawa has publicly committed to defending Canada’s supply-management system, while American dairy organizations continue to seek additional access. That collision of domestic political priorities explains why the 2027 consultation matters. Stakeholders are not starting with a blank sheet; many of the most difficult Canadian-U.S. files have already been identified.
The Economic Scale Makes Every Change Matter
The arguments are intense partly because the commercial relationship is enormous. U.S. Census Bureau data show that the United States exported about US$333.6 billion in goods to Canada in 2025 and imported roughly US$381.9 billion, producing total two-way merchandise trade of more than US$715 billion. Washington recorded a goods deficit with Canada of approximately US$48.3 billion that year, a figure the Trump administration has repeatedly cited when arguing that the relationship needs to be rebalanced.
Canada measures the relationship from a different angle. Ottawa says roughly C$3.5 billion in goods and services crossed the Canada-U.S. border every day in 2025. Investment ties are similarly deep. U.S. Bureau of Economic Analysis data placed Canada among the largest sources of foreign direct investment in the United States in 2025, with a direct-investment position of about US$747 billion when measured by the country of the foreign parent. This scale makes seemingly narrow rule changes consequential. An adjustment affecting vehicle content, customs paperwork, procurement eligibility or agricultural access can influence sourcing decisions, prices and future plant investment across industries that have spent decades organizing themselves around continental trade.
Canada Is Entering This Round With Its Own Red Lines
Ottawa is not approaching the next review as a passive target for American demands. Following the July 2026 meeting, Minister responsible for Canada-U.S. Trade Dominic LeBlanc reiterated Canada’s support for renewing CUSMA while saying Canadian officials wanted substantive discussions about U.S. tariffs affecting steel, aluminum, automobiles and lumber. Canadian preparations have also been unusually broad. Global Affairs Canada received 5,143 submissions during its 2025 CUSMA consultations, compared with only 137 written submissions during an earlier consultation phase.
The Canadian feedback showed considerable support for preserving predictable, tariff-free North American access while improving customs procedures and modernizing parts of the agreement. Respondents also strongly backed the protection of supply management in dairy, poultry and eggs. Businesses warned that tighter rules of origin could create new costs if they fail to reflect how modern North American supply chains actually operate. That creates an important counterweight to the U.S. consultation now underway. American manufacturers may ask Washington for stricter regional-content rules at the same time Canadian manufacturers argue that excessive tightening would disrupt production. Ottawa has also stressed that it wants to preserve preferential U.S. market access, making the negotiations as much about defending existing advantages as winning new ones.
This Is Pressure, Not the End of CUSMA
The most important point for businesses is that the latest Washington notice does not mean CUSMA is about to disappear. The agreement remains legally in force, and Article 34.7 gives the three governments years to reach a renewal agreement. Even after the United States declined the 2026 extension, all three countries retained the ability to approve a fresh 16-year term during a later review. The immediate milestones are much closer: the January 12 public-comment deadline, the USTR hearing and the negotiations leading into the 2027 joint review.
The risk is the uncertainty created by repeating the exercise every year. Trade-policy researchers have warned that businesses making long-lived investments—from assembly plants and battery factories to processing facilities and logistics networks—must now consider the possibility that the continental rules could change repeatedly or that CUSMA could ultimately expire in 2036. Current tensions make that uncertainty harder to dismiss. Washington and Ottawa are already fighting over tariffs, automobiles, dairy and other market-access issues. The new consultation therefore represents more than routine housekeeping. It gives American industries another opportunity to write their complaints and ambitions into the next negotiating round—and gives Canada a clear warning about where the pressure may come from next.
