United States President Donald Trump is privately considering the possibility of leaving the trade agreement signed between the USA, Mexico and Canada, known as USMCA, generating even more uncertainty about the future of the agreement in crucial renegotiations involving the three countries.
The president has asked his aides why he should not withdraw from the agreement, which he signed during his first term, although he has stopped short of explicitly signaling that he will do so, according to the people who spoke on condition of anonymity to describe internal discussions.
A White House official, asked about the discussions, described Trump as the ultimate decision-maker and someone who always seeks a better deal for the American people. Discussions about possible action amount to baseless speculation ahead of an announcement by the president, the official said.
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An official in the office of the US Trade Representative, Jamieson Greer, stated that automatic approval of the 2019 terms was not in the national interest and that the administration intended to keep Trump’s options open and negotiate to resolve the issues that had been identified.
Both officials spoke on condition of anonymity and declined to comment directly on whether Trump was considering exiting the trade deal. Greer said Tuesday that the government would hold separate talks with Mexico and Canada, arguing that trade relations with Canada are more strained. He did not say whether Trump would approve an extension.
“By and large, these negotiations will proceed bilaterally and separately. The Mexicans are being quite pragmatic right now. We’ve had a lot of conversations with them. With the Canadians, it’s more challenging,” Greer told Fox Business.
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The United States-Mexico-Canada Agreement (USMCA) is scheduled for mandatory review before a possible extension on July 1, a process that was once considered routine but has turned into a contentious negotiation. Trump demanded additional trade concessions from Ottawa and Mexico City and pressured them to address unrelated issues including migration, drug trafficking and defense.
Greer will recommend renewing the agreement if a resolution can be reached that incorporates input from industry representatives, the official said, highlighting stricter rules of origin for essential industrial goods, enhanced collaboration on critical minerals, worker protections and combating dumping as areas of potential concern.
If the countries agree to the renewal, the agreement will remain in force for another 16 years. Otherwise, it could trigger annual reviews for a decade, until the agreement expires in 2036. Any country can announce its intention to withdraw six months in advance.
Such a move would shake the foundations of one of the world’s largest trade relationships — the pact covers approximately $2 trillion in goods and services — and even the threat of a US exit would generate uncertainty among investors and world leaders.
American business groups and lawmakers would almost certainly rebel. The prospect of higher tariffs also threatens to worsen affordability concerns ahead of November’s midterm elections, in which Trump’s Republicans already face an uphill battle to maintain control of Congress.
Trump often consults top advisors on a variety of issues; Questions can provide information about what he thinks, but they are far from predicting his actions with certainty. It is unclear whether Trump will publicly threaten to leave or formally issue the warning. It is possible that if he does, he will use this as a way to push for a more favorable deal rather than proceed with the US withdrawal from the agreement.
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Trump has already started to increase pressure on Canada and Mexico; He threatened to increase tariffs on Canadian goods to 100% if the country negotiates a trade deal with China, raise tariffs on Canadian aircraft to 50% if Canada does not approve certain Gulfstream jets, refused to allow the opening of a new bridge connecting Ontario and Michigan, and promised tariffs on products from Mexico and other countries that export oil to Cuba.
Canadian Prime Minister Mark Carney said Tuesday that he had a “positive” conversation with Trump following the bridge threat, adding that they also discussed reviewing the USMCA, although he did not elaborate on those discussions.
The USMCA replaced the North American Free Trade Agreement (NAFTA), which had controlled trade between the three countries since 1994 but became the target of Trump’s ire during his first campaign for the White House. Trump threatened to abandon NAFTA before agreeing to the new deal, which tightened rules, increased U.S. automotive content requirements and included an expiration clause, which mandated this summer’s renegotiation.
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Despite having negotiated the current system, Trump was dissatisfied with the North American trade relationship. During a visit to a Ford Motor Co. plant near Detroit, he called the pact “irrelevant” but stopped short of saying he would abandon it. He also mentioned the possibility of negotiating bilateral agreements with Canada and Mexico.
“I don’t even think about USMCA,” he said. “I want Canada and Mexico to prosper, but the problem is we don’t need their products.”
Trump gave a different signal about the deal last May when he met with Carney, saying, “It exists, it’s good. We use it for certain things” and calling it “great for all countries.” But, he noted at the time, the 2026 renegotiation was approaching “to adjust it or close it”.
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Any U.S. exit from the USMCA could cause immediate economic harm by exposing more Mexican and Canadian exports to higher U.S. tariffs. Currently, most products — with notable exceptions, including automobiles — sold under the agreement are exempt from Trump’s global tariffs.
As a result, Mexico and Canada have comparatively low average effective tariff rates relative to other products from major economic powers. Both countries are the U.S.’s two biggest trading partners and the top buyers of American goods, according to 2024 trade data. If leaving the pact triggers Canadian and Mexican retaliation, it could undermine his campaign promise to boost American exports.
In the long term, the mere possibility of exiting the agreement could further alienate the three neighbors and reverse a three-decade effort to integrate their supply chains.
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Carney, at last month’s World Economic Forum in Davos, urged medium-sized countries to build new ties to resist economic coercion from aggressive superpowers, declaring the old rules-based international order a “fiction.”
The historic speech, a thinly veiled criticism of the US, angered Trump and helped motivate his latest series of threats against Canada.
The president’s statement in January that North Atlantic Treaty Organization (NATO) troops remained “somewhat removed from the front lines” in Afghanistan also angered Canadians, many of whom boycotted American products and canceled trips to the US due to Trump’s uncompromising stance on trade. Around 158 Canadian soldiers died in that conflict.
Trump’s unpredictability has kept world leaders on constant alert for most of his second term. His argument that the U.S. does not need to import automobiles from Canada served as a warning to an industry that is closely integrated across the three countries, as did his moves to impose tariffs on North American steel and aluminum.
However, he also demonstrated a willingness to preserve much of the USMCA, particularly with the exemption from its tariff regime, which arose from warnings from the automotive sector.
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