Trump Signals Possible USMCA Exit Ahead of Renegotiation, Saying It Brings “No Benefit”

[Financial News] Donald Trump, the president of the United States of America (U.S.) who launched the United States–Mexico–Canada Agreement (USMCA) during his first term, has said ahead of the renegotiation deadline that the pact brings “no benefit” and is “irrelevant” to the U.S.
According to The Wall Street Journal (WSJ), Donald Trump on the 13th (local time) toured a Ford Motor Company plant in Dearborn, Michigan, and took questions from reporters. Asked about the United States–Mexico–Canada Agreement (USMCA), which is up for review in July, he said, “It has no benefit and is irrelevant to the U.S. Canada might like it. Canada wants it. They need it.”
The United States of America (U.S.), Canada, and Mexico had earlier torn down tariff barriers by launching the trilateral free trade agreement North American Free Trade Agreement (NAFTA) in 1992. During his first term, Trump argued that the NAFTA framework was disadvantageous to the U.S., terminated it, and created a new three-way FTA, the United States–Mexico–Canada Agreement (USMCA). The new framework took effect in 2020. At the time, Trump hailed the launch of USMCA as “the most important trade deal in history.”
Since beginning his second term last year, Trump has claimed that the USMCA he championed is also unfavorable to the U.S. After reigniting a tariff war in his second term, Trump accused Chinese companies of building factories in Mexico and then using USMCA to ship products into the U.S. market tariff-free.
Under USMCA, the three North American countries agreed to review implementation every six years and then decide whether to extend the agreement. The first review date is July 1 this year. If the three countries agree not to extend it, USMCA will be terminated in 2036.
Despite USMCA, Trump effectively undercut the agreement last February by imposing retaliatory tariffs on Canada and Mexico over the opioid painkiller Fentanyl. Although he later removed USMCA-related items from the retaliatory tariff list, he has continued to air grievances against the U.S.’s North American neighbors. Jamieson Greer, head of the Office of the United States Trade Representative (USTR), said in an interview with Politico last month that “the scenario of a USMCA withdrawal is always on the table” and that “the president only wants deals that are favorable to the U.S.”
North American automakers that source parts from Canada and Mexico were alarmed by Trump’s latest comments on USMCA. Mark Reuss, president of General Motors (GM), on the 13th pointed to the three USMCA member countries and said, “Our supply chain runs through all three countries, and that is not a simple matter. It is very complex.” He added, “All parts of North America are a major strength.”
Trump, however, while touring the Ford Motor Company plant that day, referred to the other USMCA member countries and said, “The problem is that we don’t want their products.” He stressed, “We don’t want cars made in Canada, and we don’t need cars made in Mexico. We want manufacturers to build them in the U.S.”
pjw@fnnews.com Park Jong-won Reporter