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Trade between Canada, the United States of America, and Mexico has helped each country foster valuable working relationships. However, if you haven’t imported from one of these two countries since 2019, you’ll need to know about the free trade agreement (FTA) each one participates in.
The North American Free Trade Agreement (NAFTA) was an FTA that eliminated tariffs on most products traded between Mexico, Canada, and the United States. The FTA went into effect on January 1, 1994, and it gradually phased out tariffs for numerous products until January 1, 2008.
Tariffs were eliminated for many items, such as:
NAFTA succeeded in creating a huge free-trade zone between these three countries. The FTA also established many other beneficial provisions.
On June 30th, 2020, NAFTA came to an end and would be replaced by a new FTA.
On November 30, 2018, the United States-Mexico-Canada Agreement (USMCA) was signed and took full effect on July 1, 2020. This FTA replaced and improved many of the provisions set by NAFTA.
USMCA consists of 34 chapters and numerous side letters. Many of NAFTA’s original chapters remain in this new FTA. That said, the member countries made changes to the provisions of its predecessor.
This includes increased intellectual property protections and the establishment of an independent investigatory panel that looks into worker rights violations. USMCA also contains other provisions for products that weren’t as significant under NAFTA.
USMCA has a 16-year lifespan, which means it will end in 2036. However, each member country plans to review the FTA in July 2026 to determine if they want to renew it.
Now that you have a basic understanding on how these FTAs work, it’s important to know where they differ from one another. I’ve provided a graphic that shows the variations between NAFTA and USMCA.
As the comparison shows, USMCA enhanced many of the provisions created by NAFTA. This has made importing much easier for businesses working under this FTA.
The USMCA Free Trade Commission is the central oversight body of the agreement and is composed of representatives from the participating nations. The commission met on July 1, 2026 to conduct a joint review and decide if the USMCA should be extended beyond its 16-year term.
The U.S. chose not to renew the USMCA in its current form, but Mexico and Canada confirmed their support for extending the agreement. This doesn’t mean the agreement will be terminated immediately. Instead, the USMCA will remain in effect until its expiration date on July 1, 2026.
Since the U.S. chose not to renew the USMCA, the Free Trade Commission must conduct an annual joint review for the remainder of the agreement’s term. Article 34.74 of the USMCA allows the participating nations to extend the agreement at any point before its expiration.
On July 20, 2026, the president of the United States signed three proclamations to impose Section 338 tariffs of 50% on specific goods from Canada. These tariffs are scheduled to take effect August 19, 2026.
This covers commodities ranging from hockey sticks to cement. While the USMCA is designed to remove trade barriers such as tariffs on imported goods from each participating nation, this doesn’t apply to Canadian goods covered by Section 338.
If you need help importing USMCA-qualifying goods into the U.S. or tariffs more broadly, USA Customs Clearance can help. We have a team of licensed customs brokers who know all the regulations you’ll need to import compliantly. Give our team a call at (866) 753-6709 or reach out to us on our contact page.
Sources:
The North American Free Trade Agreement (NAFTA), Congress, 2017
Agreement Between the United States of America, the United Mexican States, and Canada 7/1/20 Text, Office of the United States Trade Representative
Fact Sheet: President Donald J. Trump Imposes Additional Tariffs on Canada, The White House, 2026
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