China will ‘heat things up’ and cause tension in the renegotiation of the T-MEC in 2026, warns the US

The United States issued a warning about the potential tensions that could arise during the renegotiation of the Agreement between Mexico, the United States and Canada (USMCA) in 2026, citing China as a key factor that could generate frictions in the process.

During her participation at a Brookings Institution event, Katherine Tai, the United States Trade Representative (USTR), addressed the challenges ahead in the trade agreement review scheduled for that year. Tai acknowledged that the review mechanism was “tremendously controversial” during the original negotiations, reflecting the compromise needed to establish it.

According to Tai, the review of 2026 represents a “turning point” to reevaluate the operation of the USMCA, and highlighted that trade disputes and their results must be part of this process, in case they cannot be resolved solely through the dispute resolution system.

However, the US official warned that China’s role cannot be underestimated or exaggerated.

“It’s already a really important element of tension and concern that’s emerging in this very intimate trade relationship that we have between three countries,” Tai said.

Tai pointed out that the presence of external actors such as China is increasingly impacting trade relations between United States, Mexico and Canada, as well as its global competitiveness.

“We are now dealing with the fact that there are other actors who are impacting every day how we relate to each other and how we compete globally,” he stated.

The United States trade representative stressed the importance of closely monitoring all factors on the path to 2026 to be prepared for that crucial moment. She recognized that they cannot simply “wake up” on January 1, 2026 and decide what to do, so prior conversations and reports will be essential.

Tai also warned that they do not want the 2026 review happens with all parties too comfortable, as the goal is to maintain a certain level of “uncomfortability” involving some uncertainty to motivate countries to continue re-evaluating their trade policies and programs in response to rapid changes in the global environment.

“If we don’t stay motivated to respond, then we are going to lose,” Tai emphasized, adding that the review mechanism is important for the parties to approach the conversation responsibly, but they must also accept that this “discomfort” is actually a necessary feature, not a bug.