The Trump administration has signalled it will push Mexico for significantly tougher terms in the ongoing renegotiation of the United States-Mexico-Canada Agreement (USMCA), with a senior administration official on Wednesday, 1 July outlining demands spanning stricter rules of origin, stronger labour and environmental standards, tighter intellectual property protections, and higher American manufacturing content requirements. The United States had declined to renew the USMCA in its current form during the agreement's first mandatory six-year joint review, though the trade pact remains in force as negotiations continue.

Key Demands on the Table

At the centre of Washington's push is a drive to ensure more manufacturing activity takes place within North America — and specifically inside the United States. A third round of bilateral negotiations between the US and Mexico is scheduled for the week of 20 July.

The senior official said the upcoming talks will address the agreement's rules of origin, North American economic security, and commitments on labour, environment, and intellectual property. 'We're gonna continue to talk to the Mexicans about rules of origin, about economic security,' the official said. 'We've also had discussions with the Mexicans conceptually on labour, environment, and I think we'll get into intellectual property.'

Automotive Rules as a Template

The administration pointed to the automotive sector as a model. When the USMCA replaced the North American Free Trade Agreement (NAFTA) in July 2020, it introduced detailed rules of origin for vehicles that, officials argue, successfully boosted regional production. Washington now wants similar provisions extended to other industrial goods.

'When we redid NAFTA and did USMCA, we had a large focus on rules of origin for autos... but we think we need to tighten those rules, and we think we need to have similar robust rules for other industrial goods outside of the automotive space,' the official said. The administration is also seeking stronger US content requirements to deter manufacturers from relocating production to Mexico purely to access the American market duty-free.

'What we don't want is a situation where... everyone says, fine, I'm just gonna move everything to Mexico and import to the US duty-free,' the official said. 'We have to have some kind of control and a rule of origin requiring US content level is one way to get at that.'

Labour, Environment and IP Concerns

Beyond manufacturing content, Washington has raised pointed concerns about Mexico's compliance record on labour and environmental obligations. 'We sense that Mexico has not really complied with a lot of the labour obligations,' the official said, adding that environmental issues along the shared border — particularly water quality — remain unresolved.

On intellectual property, the official acknowledged that Mexico had made progress over the past year but maintained that 'there's more to be done there.' The administration views stronger IP enforcement as integral to protecting American innovation-driven industries.

Economic Security Dimension

The administration is also framing the renegotiation through the lens of economic security. Officials noted that Mexico has raised tariffs on countries outside the North American region to protect its own industries — a move Washington reportedly views as broadly beneficial to the regional economy. This signals that the US sees the USMCA not merely as a trade framework but as a geopolitical tool to insulate North American supply chains from third-country competition.

Notably, this is the first time the USMCA's joint review mechanism has been triggered since the pact came into force in 2020, making the current round of talks a significant stress test for North American trade architecture. With a third bilateral round set for late July, the pace and outcome of US-Mexico negotiations will determine whether Canada is drawn into a broader trilateral revision.