Trump declines to renew major trade deal with Canada, Mexico

The Trump administration announced Wednesday it will not renew the United States–Mexico–Canada Agreement (USMCA) in its current form. 

Wednesday marked the deadline to renew the trade agreement, which President Trump struck with Canada and Mexico during his first administration.

U.S. Trade Representative Jamieson Greer noted in a statement that even though the administration will not renew the USMCA, it will remain “in force pending resolution of these issues or until the Agreement’s termination.”

Greer noted that the U.S. will meet with Mexico during the week of July 20 for a third round of negotiations. 

“The United States will continue to engage with Mexico and Canada to address the Agreement’s shortcomings and our trade deficits with these countries,” he said. 

The agreement is set to automatically expire July 1, 2036, unless all three member countries agree to formally renew it for an additional 16-year term.

Canada had urged the U.S. and Mexico to extend the deal for another 16 years before July 1. It will now go into a cycle of annual reviews for the next decade.

Last year, the U.S. had a $46 billion trade deficit ⁠in goods with Canada and a $197 billion deficit with Mexico, according to Reuters. 

Trump slapped tariffs on both neighboring countries at the beginning of his second term in an effort to change Washington’s trade relationship with the nations.

A senior administration official told reporters on a call Wednesday that the U.S. has already spoken with Mexico about strengthening the rules of origin of “the agreement, enhancing economic security alignment, and resolving bilateral issues.”

“They [Mexico] do understand the administration’s tariff policies,” the official said, adding that Mexico had made proposals on deficit reduction. 

Canada, they continued, is in a different position on the matter. 

“Along with the People’s Republic of China, Canada was one of the only countries in the world to retaliate against the United States following the president’s historic trade action to eliminate the U.S. trade deficit and reshore manufacturing,” the official said, but noting the administration would continue discussions with Canada. 

Trump said earlier this month that he was not looking to renew the agreement. 

“I made the deal and the primary reason I made the deal is that NAFTA was the worst trade deal I’ve ever seen. Yeah. And I made it better. But I had the right to terminate,” the president said at the time, referencing the previous agreement called the North American Free Trade Agreement.