Exactly six years ago, the U.S.-Mexico-Canada Agreement (USMCA) went into effect. On Wednesday, July 1, the Trump administration announced plans to stop the deal despite it widely being viewed as successful across North America.
Trump administration representative told media during a call Wednesday the U.S. will now begin negotiating amendments with a potential outcome being separate, bilateral trade agreements with each of the U.S. neighboring countries.
The move announcement is a stark contrast for the President, who negotiated and approved the USMCA deal in 2018 after pulling out of the North American Free Trade Agreement.
In 2019 social media posts from Trump, he shared that the USMCA was “the best and most important trade deal ever made by the USA.” Now, seven years later, the administration says the agreement didn’t accomplish the original goal of balancing trade amongst the three countries.
On the call Wednesday a senior administration official said, “The primary issues that the president’s been focused on with the world, and particularly with Canada, Mexico, is our trade deficit…When USMCA was adopted six years ago by a bipartisan majority and the president’s approval, the idea is that we would modernize the agreement and it would also lead to rebalancing. The agreement did succeed in modernizing the agreement. But with respect to rebalancing, our trade deficits with both Mexico and Canada shot up during the Biden administration…we believe that the USMCA did not operate to control the deficit like the president intended, so that’s really the heart of it.”
The senior administration official did emphasizes that the White House is not interested in dragging out talks, saying periodic reviews are a feature of the deal, saying, “It’s called the joint review, and the idea was to make sure that any agreement between Mexico, Canada and the United States always put America first, rather than let a trade deal persist on autopilot over decades.”
Since the beginning of his current term, Trump has made broad global tariffs a hallmark of his economic policy. He and his staff have repeatedly taken issue with tariff exemptions on USMCA-compliant goods, which are part of the 2018 agreement. Wednesday’s media call also included talk of brewing contention growing between Washington and Ottawa throughout President Trump’s second term.
Following the Office of the U.S. Trade Representative announcement that the United States has not agreed to renew the USMCA in its current form and will continue separate negotiations with Canada and Mexico, R-CALF USA CEO Bill Bullard issued the following statement:
“Pursuing separate trade agreements with Canada and Mexico presents an opportunity to correct the serious deficiencies in the NAFTA and USMCA, which have contributed greatly to the chronic contraction of the U.S. cattle industry. Now is our opportunity to begin managing the trade with these two countries that has been displacing our domestic production opportunities. We are encouraged that the administration is moving in that direction. R-CALF USA looks forward to working with the Trump administration as it negotiates separate agreements with Canada and Mexico that put America's cattle producers first, strengthen our domestic cattle industry, and advance our nation's long-term food security and economic interests.”
The National Cattlemen’s Beef Association and U.S. Cattlemen’s Association have not yet provided comment.