The Trump administration signaled it may withdraw from the United States-Mexico-Canada Agreement next year, threatening the trade deal President Donald Trump negotiated during his first term.
US Trade Representative Jamieson Greer told Politico that Trump could exit the USMCA in 2026.
“The president’s view is he only wants deals that are a good deal,” Greer said. “The reason why we built a review period into USMCA was in case we needed to revise it, review it or exit it.”
Related: USMCA review begins as USTR opens consultations
Trump reinforced that stance Wednesday. “We’ll either let it expire, or we’ll maybe work out another deal with Mexico and Canada,” he told reporters.
The statements came during hearings where the US Trade Representative gathered testimony on the pact. The USMCA facilitates roughly $2 trillion in annual cross-border commerce and replaced NAFTA in 2020.
From last year: Trump’s Tariff Threats: A Prelude to USMCA Review Negotiations?
The agreement expires in 2036 unless all three nations agree to extend it by July 1, 2026.
US business leaders opposed abandoning the deal. “Our industry would not survive a long tariff battle with our two closest customers,” Dave Walton of the American Soybean Association testified Wednesday.
Kevin Brady, co-chair of the Coalition for North American Trade, warned withdrawal would trigger “an economic catastrophe for all three countries.”
Greer suggested splitting the agreement into separate bilateral deals. “Our relationship with the Canadian economy is totally different than our relationship with the Mexican economy,” he told Politico.
The administration maintains 50% tariffs on Canadian steel and aluminum plus 25% duties on other Canadian imports. Mexico has mostly escaped such measures.
Trade experts disagree on whether the threats constitute intent or negotiating pressure. “The mere suggestion of USMCA termination serves as an exceedingly potent, almost extortionary, bargaining chip,” trade lawyer Barry Appleton told The Globe and Mail.
Goldy Hyder of the Business Council of Canada called it standard tactics. “There is a process here where we’re supposed to sit down and talk about how to make [CUSMA] better,” he said.
Former Canadian diplomat Ben Rowswell took a darker view. “This likely is the end of CUSMA,” he told CBC News. “I think it’s a dead man walking.”
Canadian Prime Minister Mark Carney met Trump Friday during the FIFA World Cup draw. Trade discussions have stalled since October.
The USTR must inform Congress by early January whether the administration will pursue an extension.
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