US Trade Rep. Greer eyes interim US deals with Canada, Mexico by year end

Signs of a delayed, piecemeal approach to USMCA renegotiation add to the uncertainty already weighing on North American trade flows, particularly for autos, steel and aluminum exporters awaiting relief from Section 232 tariffs. Markets are likely to view an interim deal with Mexico as more achievable near term, given Mexico's direct engagement in bilateral talks, while a genuine breakthrough with Canada looks harder to square with Trump's freshly imposed 50% tariff on a swathe of Canadian goods this same week. That escalation raises real questions over how credible Greer's timeline for a Canada arrangement by year end actually is, and whether Ottawa's exclusion from the Mexico talks leaves it with little leverage to negotiate better terms. The prospect of tougher rules of origin and labor standards slipping into 2027 also prolongs the investment uncertainty already weighing on regional manufacturing decisions.

--- Washington is angling for quick interim trade patches with Mexico and Canada, even as a fresh 50% tariff on Canadian goods clouds the path to any deal with Ottawa.

Summary:

• US Trade Representative Jamieson Greer says he hopes for interim deals with Canada and Mexico by year end
• Harder USMCA issues, including autos rules of origin and labor and environmental standards, pushed into 2027 talks with Congress
• Mexico and Canada are seeking relief from Trump's Section 232 tariffs of 25% on autos and 50% on steel and aluminum
• Canada excluded from bilateral USMCA talks in Mexico City, raising the risk it must accept terms set by Mexico
• Trump this week imposed a 50% tariff on about $20bln of Canadian goods, including beer, dairy and hockey sticks
• Trump declined to renew USMCA on 1 July, triggering a 10 year countdown to its expiration absent a renewal agreement

US Trade Representative Jamieson Greer said on Wednesday he hopes to secure interim trade arrangements with Mexico and Canada before the end of the year, while pushing thornier changes to the US Mexico Canada Agreement into 2027, according to Reuters. Testifying before the Senate Finance Committee, Greer said he would like to have some arrangement in place with each country, though he offered no specifics on what such deals might look like.

Greer said tougher issues, including tighter rules of origin for autos and labor and environmental standards, would likely require further discussion with Congress next year, effectively confirming that a full USMCA renewal will not happen in 2026. Mexico's Economy Ministry declined to comment on his remarks, and Canada's trade ministry did not immediately respond. One trade adviser said Greer's testimony confirms Washington is no longer pursuing a clean renewal this year, and predicted the likely outcome is an interim political arrangement that leaves the hardest issues, and much of the investment uncertainty, unresolved.

Both Mexico and Canada are seeking relief from the Section 232 national security tariffs Trump imposed last year, 25% on autos and 50% on steel and aluminum. Greer was due in Mexico City for bilateral talks with Mexican officials, while Canada has been excluded from those negotiations, raising the risk Ottawa is left to accept whatever terms Mexico agrees to. Washington is also pressing Mexico to raise North American content requirements for vehicles to qualify for preferential access, and has tied progress on a Mexico deal to non-trade issues including border security and compliance with a decades old water sharing treaty.

Whether a Canada arrangement materialises on anything like Greer's timeline looks considerably less certain, however. His testimony came in the same week Trump slapped a 50% tariff on roughly $20bln of Canadian goods, including beer, dairy and hockey sticks, in retaliation for Ottawa's own countermeasures, a move that sits awkwardly alongside talk of an imminent interim deal and underscores how strained the US Canada trade relationship has become just as Trump's decision not to renew USMCA starts a 10 year countdown to its expiration.