[13][14][15][16][17] USMCA is primarily a modernization of NAFTA, namely concerning intellectual property and digital trade,[18][19] and borrows language from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), of which Canada and Mexico are signatories.

[19][20][Note 2] On February 1, 2025, citing an "extraordinary threat posed by illegal aliens and drugs", President Trump, newly returned to office, imposed an additional 25% tariff on imports from Canada and Mexico.

The formal negotiation process began on May 18, 2017, when the U.S. Trade Representative (USTR), Robert Lighthizer, notified Congress that he intended to renegotiate NAFTA starting in 90 days.

This statement was motivated by the pending change of government in Mexico, in which the then-incoming president, Andrés Manuel López Obrador, disagreed with much of the negotiated language and might be unwilling to sign the deal.

[45] It was later revealed in a memoir published by Stephen Schwarzman, the CEO and founder of American LBO specialist The Blackstone Group, that he had incited Justin Trudeau to concede the protected dairy market in the USMCA negotiations.

[46] Fox News reported on December 9, 2019, that negotiators from the three countries reached an enforcement agreement, paving the way for a final deal within 24 hours and ratification by all three parties before the end of the year.

[47] Provisions of the agreement cover a wide range, including agricultural produce, homelessness, manufactured products, labor conditions, and digital trade, among others.

[40] While the deal's text did not include the more demanding version of this provision, there is concern that the increased domestic sourcing, aimed at promoting U.S. employment, will come with higher upfront input costs and disruptions to existing supply chains deriving outside of certain developing or once more industrious zones, for example the “Rust” Belt.

[52] To facilitate cross-border trade, Mexico and Canada agreed to raise their de minimis exemption thresholds for the application of taxes and customs duties.

[59] The specific standards Mexico is required to comply with are detailed in the International Labour Organization's Convention 98 on freedom of association and collective bargaining.

Chapter 11 is the third mechanism, known as investor-state dispute settlement, wherein multinational corporations are enabled to sue participating governments over allegedly discriminatory policies.

[69][70] In addition to building on the existing NAFTA fused with elements from the Trans-Pacific Partnership, the USMCA also incorporates elements from the "Beyond the Border" accord signed by former Prime Minister Stephen Harper and former president Barack Obama, most notably the "single window" initiative and folding the "Regulatory Cooperation Council" into the "Good Regulatory Governance" chapter 28 of the new accord.

Wider phenomena that are associated with skill-based labor enfranchisement include benefits socioeconomically to that of domestic relationships and children, public safety and crime reported or not, and resilience, and hopefully, within any extant skill-deprived regions.

[77] In fact, a senior White House official said in connection to the USMCA deal that "We have been very concerned about the efforts of China to essentially undermine the U.S. position by entering into arrangements with others.

[81][82] Consequently, Canadian Deputy Prime Minister Chrystia Freeland, U.S. Trade Representative Robert Lightizer and Mexican Undersecretary for North America Jesus Seade formally signed a revised agreement on December 10, 2019, which was ratified by all three countries by March 13, 2020.

[87] Forty Congressional Republicans urged Trump against signing a deal that contained "the unprecedented inclusion of sexual orientation and gender identity language"; as a result, Trump ultimately signed a revised version that committed each nation only to "policies that it considers appropriate to protect workers against employment discrimination" and clarified that the United States would not be required to introduce any additional nondiscrimination laws.

[89] On December 2, 2018, Trump announced he would begin the six-month process to withdraw from NAFTA, adding that Congress needed either to ratify the USMCA or else revert to pre-NAFTA trading rules.

[95] President Donald Trump warned on September 25, 2019, that an impeachment inquiry against him could derail congressional approval of USMCA, dragging down Mexico's peso and stock market as investors fled riskier assets.

[97] Bloomberg News reported on October 29, 2019, that the Trump administration planned to include in the legislation approving the pact a provision that would allow the USTR to directly control how and where cars and parts are made by global automakers.

[103] It officially amended NAFTA[104] but not the 1989 Canada–United States Free Trade Agreement which is only "suspended", so in case parties fail to extend or renew it in 6 years, FTA would become the law.

[105][106] On April 24, 2020, Lighthizer gave official notice to Congress that the new trade deal was set to come into force on July 1, 2020, and notified Canada and Mexico to that effect.

[110] On November 27, 2018, the government of Mexico said it would give to Jared Kushner its highest civilian honor, the Order of the Aztec Eagle, for his work in negotiating the USMCA.

[113] On April 3, 2020, Mexico announced it was ready to implement the agreement, joining Canada,[17] though it requested that its automotive industry be given extra time to comply.

On the same day, the Senate passed first, second, and third readings of the bill without recorded votes,[127] and Governor General Julie Payette granted royal assent and it became law, thus completing Canada's ratification of the legislation.

[136] In 2018 Jim Balsillie, former chair of once-dominant handheld telephone firm Research In Motion, wrote that the "colonial supplicant attitude" of Canadian politicians was a wrong-headed approach to the data and IP provisions of the USMCA.

[132] An International Monetary Fund (IMF) working paper issued in late March 2019 found that the agreement would have "negligible" effects on the broad economy.

[132][137] The IMF study projected that the USMCA "would adversely affect trade in the automotive, textiles and apparel sectors, while generating modest aggregate gains in terms of welfare, mostly driven by improved goods market access, with a negligible effect on real GDP.

[138][139] The analysis cited by another study from the Congressional Research Service found the agreement would not have a measurable effect on jobs, wages, or overall economic growth.

[138] In December 2019, Thea M. Lee and Robert E. Scott of the Economic Policy Institute criticized USMCA as "weak tea, at best" because it would have "virtually no measurable impacts on wages or incomes for U.S. workers," noting that "The benefits are tiny, and it's highly uncertain whether the deal will be a net winner or loser, in the end.

"[140] In June 2020, the Nikkei Asian Review reported that Japanese auto companies are opting to "triple Mexican pay rather than move to the US" to avoid tariffs on automotive parts.