Trump Shows Indifference to USMCA, Setting Stage for Contentious Renegotiation
Former President Donald Trump expressed complete indifference toward the North American trade agreement with Canada and Mexico. His comments signal a potentially lengthy and difficult renegotiation process for the United States' largest free-trade pact.
"We Could Have It or Not"
Trump made his remarks during a tour of a Ford Motor Company plant on Tuesday. When reporters asked if he would engage in renegotiating the US-Mexico-Canada Agreement or let it lapse, Trump responded bluntly. "We could have it or not, it wouldn't matter," he declared. "It's irrelevant."
The former president signed the USMCA in 2020 during his first term. The agreement replaced the 1992 North American Free Trade Agreement that Trump had long criticized. Now subject to a mandatory review this year, the pact faces an uncertain future under Trump's apparent disinterest.
Warning Shots to Trading Partners
Trump's comments represent another warning shot to multiple parties:
- The U.S. auto sector, which relies heavily on the agreement
- Officials in Mexico City who have dealt with Trump's erratic trade policies
- Leaders in Ottawa who face similar challenges
These statements suggest the scheduled renegotiation could turn into a platform for Washington to air grievances against America's two largest trading partners.
Renegotiation Timeline and Consequences
The USMCA faces a critical juncture this year. If all three countries agree to renew the pact before July 1, it would extend for sixteen years. Without this agreement, the parties must hold annual joint reviews until they approve it again or the pact expires in 2036.
Separately, any country can exit the agreement with six months' written notice to the other parties. It remains unclear whether Trump will pursue this option or if negotiations would follow to prevent the pact's collapse.
Trump's Recent Trade Actions
In recent months, Trump has repeatedly criticized the agreement. This appears to be a strategic move to gain leverage over Canada and Mexico. When asked if he still wants the deal, Trump responded, "I think they want it," referring to America's neighbors. He added, "I don't really care."
The former president elaborated on his position. "I don't even think about USMCA," he stated. "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."
During his second term, Trump has already undermined the pact by imposing then reducing new tariffs on Mexican and Canadian products. He justified these moves by arguing that fentanyl trafficking occurs through both countries, though he later exempted products covered by USMCA.
Industry Concerns and Economic Impact
The possibility of Trump dismantling the trade agreement has injected significant tension into the review process. Such action would deliver a devastating blow to both the Mexican and Canadian economies while disrupting crucial business operations.
Several industries have developed deeply interconnected supply chains across North America that would face disruption if Trump terminates the deal:
- Auto manufacturing relies heavily on cross-border components
- Agricultural trade depends on predictable market access
- Energy sectors coordinate production and distribution
Ford Chief Executive Officer Jim Farley highlighted competitive concerns. He noted that tariff breaks Trump granted to Japanese exports gave Toyota Motor Corporation a significant cost advantage. According to Farley, this advantage ranges from $5,000 to $10,000 on SUVs compared to Ford, despite Ford building its SUVs in the United States.
Ford and other U.S. automakers have urged the White House to negotiate a new North American trade deal with Mexico and Canada. They seek to maintain cost advantages for their American manufacturing operations while preserving integrated supply chains.
The coming months will determine whether the USMCA survives in its current form, undergoes substantial revision, or faces termination. Trump's dismissive attitude suggests a challenging negotiation landscape ahead for all three nations involved in this crucial trade relationship.
