The U.S. government under President Donald Trump has decided against extending its trade agreement with Canada and Mexico, sparking upcoming negotiations to amend the deal. The announcement came after a virtual meeting between U.S. Trade Representative Jamieson Greer, Canadian Trade Minister Dominic LeBlanc, and Mexico’s economy secretary, Marcelo Ebrard.
While the U.S. decision does not terminate the Canada-U.S.-Mexico Agreement (CUSMA), the deal remains in effect until 2036. The deadline set in the agreement for countries to either extend it to 2042 or renegotiate its terms was on Wednesday.
President Trump had previously praised the agreement as historic but has recently criticized it without threatening to end it outright. Any country can withdraw from the deal with a six-month notice period.
Greer stated that the U.S. did not agree to renew the USMCA in its current form and emphasized the need to address the agreement’s shortcomings and trade deficits with Canada and Mexico. The U.S. retains the option to withdraw from the agreement.
Canada emphasized the importance of ongoing discussions, particularly regarding sectoral tariffs on Canadian steel, aluminum, autos, and lumber. Mexican President Claudia Sheinbaum downplayed the significance of the deadline, suggesting that an extension could be agreed upon in the future.
The U.S. trade deficit with Canada and Mexico was cited as a key factor in the decision not to extend the agreement. The U.S. goods trade deficit, a priority for President Trump, was reportedly not controlled as intended under the USMCA.
Since the implementation of CUSMA, trade value between the three countries has increased by 37% to over $1.9 trillion US annually. The agreement has benefited all nations involved, with Canada and Mexico experiencing faster growth in exports to the U.S. compared to U.S. exports to its neighbors.
CUSMA is crucial for the Canadian economy as it exempts nearly 90% of Canadian exports to the U.S. from certain tariffs imposed by President Trump. Canada is seeking relief from tariffs on steel, aluminum, autos, and softwood lumber while also acknowledging the U.S.’s national security interests in implementing import controls.
Ongoing negotiations between Mexico, Canada, and the U.S. are expected to address these trade challenges and determine the future of the agreement.
