The US has decided to maintain tariffs on imports from Canada and Mexico, citing a persistent trade deficit as the primary reason. US Trade Representative Jamieson Greer announced that despite a 24% reduction in the trade deficit with USMCA partners since April 2025, the tariffs will remain in place. This move comes ahead of a scheduled review of the USMCA agreement in July 2026, which the administration views as an opportunity for renegotiation. Greer emphasized that the upcoming review will not simply uphold the status quo, indicating potential structural changes. The administration is considering separate discussions with Canada and Mexico, with a focus on rules of origin and external tariffs. The aim is to emphasize US-based content in manufacturing, aligning with broader industrial policies. The continuation of tariffs could impact markets by increasing costs for businesses reliant on cross-border supply chains, potentially affecting inflation and interest rates.