President Donald Trump expressed indifference toward the North American trade agreement with Canada and Mexico, portending a lengthy renegotiation of the US’s largest free-trade pact.
Trump on Tuesday said there’s “no real advantage” to the US-Mexico-Canada Agreement, which he signed in 2020 and is subject to a review this year. He said the deal primarily benefits Canada, but that Americans “don’t need their product” because “everybody’s moving here.”
“We could have it or not, it wouldn’t matter,” Trump told reporters during a tour of a Ford Motor Co. plant when asked if he would engage in renegotiating the accord or let it lapse. “It’s irrelevant.”
Trump’s comments mark another warning shot, both to the US auto sector, which relies heavily on the agreement, and to officials in Mexico City and Ottawa who have grappled with the president’s erratic trade policy ever since his return to office a year ago. They signal that the scheduled renegotiation of the USMCA could turn into an airing of grievances by Washington against the US’s two largest trading partners.
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USMCA was one of Trump’s signature achievements during his first term, replacing the 1992 North American Free Trade Agreement he long railed against. The deal is subject to a mandatory review this year. If all countries agree to renew it before July 1, it would be extended for 16 years. But if not, then the parties would be required to hold annual joint reviews until they agree to approve it again or the pact expires in 2036.
That is separate from the withdrawal provision, which states that any country can exit the agreement with six months’ written notice to the other parties. It’s not yet clear whether Trump will do that — and, if he did, if a deal would then be struck to avert USMCA’s collapse. The pact does not fully spell out every negotiating path, and theoretically leaves open the option for talks to proceed in any format to which the three countries agree.
Trump in recent months has derided the agreement, an apparent play to gain leverage over Canada and Mexico. Asked if he still wants the deal, Trump responded “I think they want it,” referring to the US’s neighbors, adding, “I don’t really care.”
“I don’t even think about USMCA. I want to see Canada and Mexico do well. The problem is we don’t need their product. You know, we don’t need cars made in Canada. We don’t need cars made in Mexico. We want to make them here. And that’s what’s happening,” Trump continued.
Trump has already undercut the pact during his second term by imposing, then paring back, new tariffs on Mexican and Canadian products, justifying the move by arguing that fentanyl is trafficked through both countries. He later exempted products covered by USMCA.
The prospect of Trump blowing up the trade agreement has injected further tension into the review process, as it would deliver a devastating blow to the Mexican and Canadian economies and disrupt key lines of business.
Several industries, such as auto manufacturing, have developed deeply interconnected supply chains across North America that would be upended if Trump terminates the deal.
Ford Chief Executive Officer Jim Farley has said the tariff breaks Trump gave Japanese exports — lowering the rate to 15% — provided Toyota Motor Corp. a $5,000 to $10,000 cost advantage on SUVs over his company, despite Ford building its SUVs in the US. Ford and US automakers have pushed the White House to negotiate a new North American trade deal with Mexico and Canada in order to maintain a cost advantage for their American manufacturing presence.
With assistance from Keith Naughton.
This article was generated from an automated news agency feed without modifications to text.
