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Trump Administration Eyes USMCA Exit as Trade Deal Faces Uncertain Future

MarketDash Editorial Team
4 days ago
U.S. Trade Representative Jamieson Greer is floating the idea that Trump might pull out of the landmark North American trade agreement in 2026, potentially splitting it into separate deals with Canada and Mexico as tensions over manufacturing and tariffs continue to strain relations.

The United States-Mexico-Canada Agreement might not make it to its 2036 expiration date if the Trump administration gets its way. U.S. Trade Representative Jamieson Greer is openly discussing the possibility of withdrawing from the deal as early as 2026, which would be quite the plot twist for a trade pact that Trump himself signed just a few years ago.

One Deal Becomes Two?

In a podcast interview with POLITICO White House Bureau Chief Dasha Burns set to air Friday, Greer explained that the USMCA's built-in review period was designed specifically to allow for potential revisions, reviews, or even exits from the agreement. That's the diplomatic way of saying the deal has an escape hatch, and Trump might just use it.

Greer floated an interesting alternative: instead of one trilateral agreement, why not negotiate with Canada and Mexico separately? His reasoning makes a certain kind of sense—the two countries have distinctly different labor conditions, manufacturing dynamics, and trade profiles. Treating them as interchangeable trading partners might not be the best approach.

The trade representative also noted that Trump's broader push to reshore manufacturing jobs has already started affecting Ontario's auto industry, signaling that the economic ripple effects are already in motion.

Trump's Blunt Assessment

If you wanted to know where President Trump stands on all this, he didn't leave much room for interpretation. When reporters asked him Wednesday about renegotiating the USMCA, Trump said plainly: "We'll either let it expire, or we'll maybe work out another deal with Mexico and Canada."

He added his familiar refrain that "Mexico and Canada have taken advantage of the United States like just about every other country." Subtle, it was not.

The Agreement's Uncertain Path Forward

Here's the irony: the USMCA was supposed to be one of Trump's signature trade achievements from his first term. Signed in 2020, it replaced the North American Free Trade Agreement and was marketed as a modernized framework for trilateral commerce. Now it's being treated as expendable.

The Office of the United States Trade Representative opened critical hearings Wednesday on the future of the agreement, and the testimony from U.S. agriculture, business, and policy groups was remarkably consistent—keep the deal intact. These industry participants emphasized that USMCA's free-trade framework has boosted revenues by ensuring reliable access to Canadian and Mexican markets, according to Canada's CBC News.

Their input will help shape whether the administration decides to renew, renegotiate, or withdraw from the deal by the July 1, 2026 deadline. Federal law requires the USTR to submit its recommendation to Congress by January 2 on which path to pursue.

Rising Tensions With Canada

The USMCA has been under stress for months now. The Trump administration has imposed tariffs on Canada and Mexico, later reducing some of them, creating uncertainty about the agreement's stability. The deal has also become central to discussions about the American auto industry's competitiveness, with Canadian Prime Minister Mark Carney emphasizing its importance during a meeting with Trump.

Back in October, Canada was pursuing sector-specific trade deals with the Trump administration, particularly focused on steel, to help stabilize its economy as U.S. tariffs squeezed the Canadian steel industry. Industry Minister Mélanie Joly warned that delays could trigger plant closures and stressed the need for short-term relief.

But those talks hit a wall later that month when Trump abruptly halted broader trade negotiations after a Canadian advertisement criticized his tariff policies. Apparently, criticizing the tariffs and negotiating about the tariffs at the same time doesn't work so well.

So where does this leave the USMCA? In limbo, essentially. The agreement's text contemplates members staying in until 2036, but the 2026 review deadline gives Trump the opening he needs if he decides the deal isn't working for the United States. Industry groups want stability and predictability. Trump wants leverage and better terms. And Canada and Mexico are caught wondering whether they'll be negotiating together or separately—or at all.

Back to News

Trump Administration Eyes USMCA Exit as Trade Deal Faces Uncertain Future

MarketDash Editorial Team
4 days ago
U.S. Trade Representative Jamieson Greer is floating the idea that Trump might pull out of the landmark North American trade agreement in 2026, potentially splitting it into separate deals with Canada and Mexico as tensions over manufacturing and tariffs continue to strain relations.

The United States-Mexico-Canada Agreement might not make it to its 2036 expiration date if the Trump administration gets its way. U.S. Trade Representative Jamieson Greer is openly discussing the possibility of withdrawing from the deal as early as 2026, which would be quite the plot twist for a trade pact that Trump himself signed just a few years ago.

One Deal Becomes Two?

In a podcast interview with POLITICO White House Bureau Chief Dasha Burns set to air Friday, Greer explained that the USMCA's built-in review period was designed specifically to allow for potential revisions, reviews, or even exits from the agreement. That's the diplomatic way of saying the deal has an escape hatch, and Trump might just use it.

Greer floated an interesting alternative: instead of one trilateral agreement, why not negotiate with Canada and Mexico separately? His reasoning makes a certain kind of sense—the two countries have distinctly different labor conditions, manufacturing dynamics, and trade profiles. Treating them as interchangeable trading partners might not be the best approach.

The trade representative also noted that Trump's broader push to reshore manufacturing jobs has already started affecting Ontario's auto industry, signaling that the economic ripple effects are already in motion.

Trump's Blunt Assessment

If you wanted to know where President Trump stands on all this, he didn't leave much room for interpretation. When reporters asked him Wednesday about renegotiating the USMCA, Trump said plainly: "We'll either let it expire, or we'll maybe work out another deal with Mexico and Canada."

He added his familiar refrain that "Mexico and Canada have taken advantage of the United States like just about every other country." Subtle, it was not.

The Agreement's Uncertain Path Forward

Here's the irony: the USMCA was supposed to be one of Trump's signature trade achievements from his first term. Signed in 2020, it replaced the North American Free Trade Agreement and was marketed as a modernized framework for trilateral commerce. Now it's being treated as expendable.

The Office of the United States Trade Representative opened critical hearings Wednesday on the future of the agreement, and the testimony from U.S. agriculture, business, and policy groups was remarkably consistent—keep the deal intact. These industry participants emphasized that USMCA's free-trade framework has boosted revenues by ensuring reliable access to Canadian and Mexican markets, according to Canada's CBC News.

Their input will help shape whether the administration decides to renew, renegotiate, or withdraw from the deal by the July 1, 2026 deadline. Federal law requires the USTR to submit its recommendation to Congress by January 2 on which path to pursue.

Rising Tensions With Canada

The USMCA has been under stress for months now. The Trump administration has imposed tariffs on Canada and Mexico, later reducing some of them, creating uncertainty about the agreement's stability. The deal has also become central to discussions about the American auto industry's competitiveness, with Canadian Prime Minister Mark Carney emphasizing its importance during a meeting with Trump.

Back in October, Canada was pursuing sector-specific trade deals with the Trump administration, particularly focused on steel, to help stabilize its economy as U.S. tariffs squeezed the Canadian steel industry. Industry Minister Mélanie Joly warned that delays could trigger plant closures and stressed the need for short-term relief.

But those talks hit a wall later that month when Trump abruptly halted broader trade negotiations after a Canadian advertisement criticized his tariff policies. Apparently, criticizing the tariffs and negotiating about the tariffs at the same time doesn't work so well.

So where does this leave the USMCA? In limbo, essentially. The agreement's text contemplates members staying in until 2036, but the 2026 review deadline gives Trump the opening he needs if he decides the deal isn't working for the United States. Industry groups want stability and predictability. Trump wants leverage and better terms. And Canada and Mexico are caught wondering whether they'll be negotiating together or separately—or at all.

    Trump Administration Eyes USMCA Exit as Trade Deal Faces Uncertain Future - MarketDash News