In a surprising move, former U.S. President Donald Trump is reportedly considering withdrawing the United States from the United States-Mexico-Canada Agreement (USMCA), according to sources cited by Bloomberg. The trade pact, which replaced the North American Free Trade Agreement (NAFTA) in 2020, has been a cornerstone of North American trade relations for the past several years.
While Trump has not made an official announcement regarding his intentions, he has questioned his advisors about the feasibility of withdrawing from the agreement. This has sparked uncertainty regarding the future of the trade deal as the U.S., Canada, and Mexico prepare for important negotiations.
Trump’s Focus on “Better Deals”
A White House official described Trump as a decision-maker who prioritizes securing the best deals for the American people. The official emphasized that discussions about potential withdrawal remain speculative until Trump makes a formal announcement.
Jameson Greer, a senior official in the U.S. Trade Representative’s office, voiced concerns about the 2019 conditions of the USMCA, stating that they no longer serve national interests. Greer added that the administration is keeping Trump’s options open while seeking to address key issues in the agreement.
Strained Relations with Canada and Mexico
Greer also revealed that the U.S. plans to hold separate bilateral talks with both Canada and Mexico. While relations with Mexico have been described as “practical,” tensions with Canada remain high. Ongoing disputes between the U.S. and Canada, including trade disagreements and tariffs, have complicated the negotiations.
Trump has reportedly demanded additional trade concessions from both countries, linking the trade talks to unrelated issues such as immigration, drug trafficking, and national defense. This approach has added to the complexity of the discussions.
A Key Review Process Looms
The USMCA is scheduled for a mandatory review before its potential renewal in July. Initially expected to be a routine process, the review has turned into a contentious negotiation. If all parties agree to renew the deal, the agreement will remain in effect for another 16 years. However, failure to reach consensus could lead to annual reviews over the next decade before the agreement expires in 2036.
Any move by the U.S. to withdraw from the deal would significantly disrupt North American trade, which accounts for approximately $2 trillion in goods and services annually. Even the threat of withdrawal could create uncertainty for investors and global leaders.
Political and Economic Implications
Trump’s willingness to renegotiate or withdraw from the USMCA underscores his dissatisfaction with current trade relationships in North America. He has previously criticized the agreement, calling it “irrelevant” during a visit to a Ford Motor plant in Detroit. Trump suggested that bilateral trade agreements with Canada and Mexico might be more beneficial.
The potential withdrawal has also raised concerns among U.S. businesses and lawmakers, who fear that higher tariffs could strain affordability and economic stability. With the midterm elections approaching in November, the Republican Party faces additional pressure to maintain control of Congress, making the timing of these discussions critical.
A High-Stakes Game
While it remains unclear whether Trump will formally threaten to withdraw from the USMCA, his actions could be part of a strategy to gain leverage in negotiations. By increasing pressure on Canada and Mexico, Trump may aim to secure more favorable terms for the United States.
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