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Good morning from the GLE Editorial desk. North America’s trade architecture is entering a genuinely uncertain decade. On 1 July, the United States declined to renew the USMCA in its current form, triggering annual reviews rather than the automatic 16-year extension Mexico and Canada wanted. A third round of bilateral US-Mexico talks lands in Mexico City this month, and Chinese-origin components moving through Mexican manufacturing are facing intensifying scrutiny as the review process unfolds. For counsel advising cross-border trade, manufacturing and supply-chain clients, the ground under North American trade just became a decade-long negotiation rather than a settled framework.
Joel Gordon, Editorial · Global Law Experts
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Quick digest
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The USMCA remains in force after the 1 July joint review, but the US declined to extend it for the further 16 years Mexico and Canada each supported, triggering an annual review cycle through 2036. |
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The US is pushing for automotive rules-of-origin thresholds to rise to 82%, with at least 50% of a vehicle’s value sourced domestically, ahead of the third US-Mexico negotiating round on 20 July. |
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Proposals circulating ahead of the review would tighten transshipment rules for Chinese-origin components assembled in Mexico, ending the era of passive assembly-based nearshoring. |
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Jurisdictions covered
United States · Mexico · Canada
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What mattered this fortnight
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| UNITED STATES & MEXICO · TRADE |
US Declines to Renew USMCA, Triggering a Decade of Annual Reviews
On 1 July, the United States, Mexico and Canada held the USMCA’s first joint review, and the US declined to renew the Agreement in its current form for a further 16 years, despite both Mexico and Canada supporting the extension. The USMCA remains in force, but the decision triggers an annual review cycle under Article 34.7.4 that will run each year until the parties agree an extension or the Agreement expires on 1 July 2036.
Why it matters for counsel: Trade counsel should treat USMCA as a live negotiation rather than a settled framework for the coming decade, and build annual-review uncertainty into long-term client planning around supply chains and market access. |
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Third US-Mexico Negotiating Round Lands in Mexico City, 20 July
The United States and Mexico will hold a third bilateral negotiating round the week of 20 July in Mexico City, expected to move into more detailed textual content following the USMCA joint review. Reported priority issues include automotive rules of origin, where the US is pushing to raise the regional content threshold to 82% with at least 50% US-sourced value, alongside steel, aluminium, labour compliance and agriculture.
Why it matters for counsel: Businesses with automotive or manufacturing supply chains touching Mexico should model the impact of a higher rules-of-origin threshold now, given how directly it would affect which products retain USMCA preferential treatment. |
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| UNITED STATES & MEXICO · TRADE COMPLIANCE |
Chinese-Origin Components in Mexico Face Tightening Transshipment Rules
As nearshoring has expanded Mexico-based manufacturing, with Chinese firms leasing over 5 million square metres of Mexican warehouse space, proposals ahead of the USMCA review would tighten transshipment rules for Chinese-origin content. The USMCA does not prohibit Chinese-owned manufacturing in Mexico, but goods must independently meet tariff-shift or regional value-content rules of origin, not simply be assembled there, to qualify for preferential treatment.
Why it matters for counsel: Businesses sourcing from Mexico-based manufacturers with Chinese-origin inputs should audit their rules-of-origin compliance now, as the era of passive assembly-based nearshoring is ending in favour of rigorous, compliance-driven integration. |
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ILLINOIS – AI REGULATION
Pritzker Signs Artificial Intelligence Safety Measures Act
Governor JB Pritzker signed the Artificial Intelligence Safety Measures Act on 6 July, requiring developers of high-risk AI models to publish a risk-management framework and report catastrophic-risk incidents within 72 hours, or 24 hours where death or serious injury is imminent. The law takes effect on 1 January 2028, giving developers an extended runway to build compliance programmes. Model developers and their US counsel should begin gap-assessing incident-reporting and audit obligations well ahead of the 2028 deadline. |
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CONNECTICUT, ARKANSAS & UTAH – DATA PRIVACY
State Privacy Amendments Take Effect Across Three States
On 1 July, amendments to Connecticut’s Data Privacy Act, Arkansas’s Children and Teens’ Online Privacy Protection Act, and Utah’s Consumer Privacy Act came into force. Connecticut’s threshold for coverage drops from 100,000 to 35,000 consumers and adds new sensitive-data categories, while Utah introduces a consumer right to correct inaccurate personal data. Businesses operating across state lines should re-run applicability assessments now that Connecticut’s threshold has dropped so sharply. |
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CANADA – FINANCIAL SERVICES
Ottawa Pre-Publishes Consumer-Driven Banking Regulations
On 27 June, the federal government pre-published draft Consumer-Driven Banking Regulations in the Canada Gazette, setting out accreditation, security, consent and enforcement rules for Canada’s new open-banking framework overseen by the Bank of Canada. The comment period runs to 26 August. Financial institutions and fintechs seeking accreditation should review the draft now, while the consultation window remains open. |
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CANADA – DATA PRIVACY
Bill C-36 Tabled to Replace PIPEDA as Federal Privacy Law
On 15 June, the federal government tabled Bill C-36, the Protection of Privacy and Consumer Data Act, intended to replace PIPEDA as Canada’s federal private-sector privacy statute. The move follows a separate joint federal-provincial finding in May that OpenAI had contravened PIPEDA disclosure obligations. Counsel advising cross-border businesses should track Bill C-36’s progress closely, given the scale of change a full PIPEDA replacement would bring. |
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CAYMAN ISLANDS – FUNDS
CIMA Operates Tokenised Funds Under Temporary Framework
Following the Mutual Funds (Amendment) Act and Private Funds (Amendment) Act coming into force earlier this year, the Cayman Islands Monetary Authority has been operating a temporary questionnaire-based process since May for approving tokenised mutual and private funds, pending finalised rules under the new statutory framework. Fund sponsors exploring tokenised structures should engage CIMA early given the interim, questionnaire-driven approval process. |
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CAYMAN ISLANDS – BENEFICIAL OWNERSHIP
Cayman Holds Firm on Legitimate-Interest Access to Ownership Register
The Cayman Islands Government has reaffirmed that access to its beneficial ownership register will remain restricted to applicants demonstrating a legitimate interest, resisting pressure from the UK for fully public access. Amendment regulations earlier this year introduced a CI$250 annual fee for multiple searches and raised the single-search fee from US$30 to US$75. Corporate services counsel should factor the revised fee structure into client cost estimates for ownership searches. |
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What we’re tracking next
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| The third US-Mexico negotiating round in Mexico City, week of 20 July, and whether automotive rules-of-origin proposals advance into firmer text.
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| Whether Canada’s separate bilateral track with the US produces its own negotiating rounds alongside the US-Mexico process. |
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Open calls for commentary
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