Donald Trump has declined to lock in a fresh 16-year commitment to the North American trade pact he negotiated in his first term, instead forcing the agreement into a precarious cycle of year-to-year reviews starting immediately.
Wednesday marked the deadline for the three nations to decide whether to renew the United States-Mexico-Canada Agreement, which currently expires in 2036. After virtual talks among US, Mexican, and Canadian officials, the US trade representative's office announced that Washington would not renew the deal under its current structure.
The USMCA survives for now. The pact remains active while negotiations resume, but the rhythm changes dramatically. Rather than facing a review every six years as the agreement originally stipulated, the deal will now be examined annually, creating perpetual uncertainty for traders and investors.
A senior Trump administration official told reporters the president had declined to "rubber stamp" the renewal without first tackling what the US sees as persistent trade imbalances. Jamieson Greer, the US trade representative, said Washington would continue talking with Mexico and Canada to fix what it views as the agreement's flaws.
The decision stands in sharp contrast to Trump's own prior statements about the deal. When he signed the USMCA in 2020, updating the older 1992 NAFTA, Trump called it the "fairest, most balanced, and beneficial trade agreement we have ever signed into law." Last month, however, he reversed course, telling reporters he viewed the arrangement as one-sided. "We don't need anything that Canada has. We don't need anything that Mexico has, but they need everything that we have," Trump said.
The shift to annual reviews could rattle supply chains and deter investment across North America. The agreement now covers roughly $2 trillion in annual trade in goods and services between the three countries, touching manufacturers, farmers, retailers, and countless other businesses whose operations depend on the pact's stability.
Author James Rodriguez: "Trump's flip on his own trade deal exposes just how transactional his approach has become, and the uncertainty he's creating will hurt companies trying to plan beyond the next 12 months."
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