Trump May Not Extend Trade Agreement with Canada and Mexico

U. S. President Donald Trump is once again hinting at the possibility of pulling out of the free trade deal with Canada and Mexico, even while his trade officials are negotiating a renewal.

During a speech in the Oval Office on Wednesday, Trump stated he is “not looking to renew” the Canada-U. S.-Mexico Agreement (CUSMA) when it comes up for review on July 1, six years after it was enacted.

Although the agreement doesn’t actually expire until 2036, any nation can withdraw from it by providing six months’ notice.

Trump signed the deal – referred to as USMCA in Mexico – during his initial term as president.

“USMCA did one thing that I loved. After six years, it comes up for renewal. I don’t know that I’m going to renew it,” he mentioned on Wednesday and went on to echo his long-standing complaints that the U. S. doesn’t need anything from Canada or Mexico.

“It was a great deal for one reason. It gave the right to terminate,” he said. “It was very important that we be able to do that. So we’re talking to them. We’ll see if we do something.”

CUSMA currently protects most of Canada’s exports to the U. S. from Trump’s tariffs. (Geoff Robins/AFP/Getty Images)

CUSMA plays a vital role in Canada’s economy because it covers around $1.3 trillion in cross-border trade with the U. S., shielding about 90 percent of Canada’s exports from Trump’s tariffs.

When Trump signed the agreement in 2018, he proudly declared it as “the most modern, up-to-date, and balanced trade agreement in the history of our country.”

Canada and Mexico Want Extension

The CUSMA text allows each country an opportunity to extend the agreement for another 16 years or initiate annual reviews.

Both Canada and Mexico have officially expressed their desire for an extension but are also open to negotiating improvements. However, Trump’s top trade official, Jamieson Greer, has not disclosed the U. S.’s stance publicly.

The U. S., however, has already started formal negotiations with Mexico regarding renewal and has arranged two more rounds of discussions next week and in late July.

Separately from talks with Mexico, Canadian Trade Minister Dominic Le Blanc met last week with Greer and his team in Washington along with chief negotiator Janice Charette.

While Le Blanc didn’t share specifics, he noted that Canada presented proposals aimed at addressing what he termed “long-standing issues that the United States has raised with us.”

WATCH | Trump floats not renewing CUSMA:

Trump threatens not to renew CUSMA trade deal

The situation sees U. S President Donald Trump suggesting he might not extend CUSMA, which is due for review on July 1.

No immediate response came from the Carney government regarding Trump’s recent statements.

If the U. S decides against renewing CUSMA during the July 1 review process, then the agreement will still remain active while all three countries negotiate changes.

A primary objective for Canada during these discussions is securing relief from Trump’s tariffs on steel, aluminum, automobiles and softwood lumber.

However, Greer has repeatedly indicated that tariffs will be something all nations must manage as part of accessing the U. S market.

Trump’s remarks on Wednesday coincided with lawmakers on Capitol Hill alongside leaders from U. S agriculture praising CUSMA.

Diverse speakers urged administration members during a House Committee on Agriculture hearing to extend CUSMA while cautioning against abandoning it.

Dalton Bartek works a field preparing for soybean planting near Wahoo, Nebraska , on April 6. The American Soybean Association joins many other agricultural industry groups advocating for CUSMA renewal.(Charlie Riedel/The Associated Press)

The trade agreement has been “extremely beneficial not only to our U. S. farmers, ranchers , foresters , and agri-businesses , but also to U. S. consumersand theeconomy overall,” stated Glenn Thompson, the committee’s Republican chairman.

A farmer and executive member of The American Soybean Association , Jamie Beyer told attendees that her sector-the largest single crop export crop-fully backs extension efforts.

This Deal Is Essential For Farmers

“USMCA is critical forthe U. S. soybean sectorand should continue without causing disruptions or further uncertainty ,”Beyer emphasized during her statement.

In Canada , trade experts were analyzing Trump’s comments seeking clues about his potential next steps.

If Trump simply intends nottoextendtheagreementforanother16years , then there’snot muchfor Canada toworryabout, says William Pellerin , an internationaltrade lawyerwith Mc Millan LLPin Ottawa.

“Fundamentally , thereare10years leftto this tradeagreement unless U. S. president triggers thescape clause,”Mc Millan told Networkon Wednesday.

Pellerin pointed out it’s no surprise Trump would threaten”thenuclear option”of withdrawingfromthetrade deal sincehisnegotiating style often involves tough public statements.

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