{"id":113149,"date":"2026-07-02T15:13:11","date_gmt":"2026-07-02T15:13:11","guid":{"rendered":"https:\/\/www.europesays.com\/canada\/113149\/"},"modified":"2026-07-02T15:13:11","modified_gmt":"2026-07-02T15:13:11","slug":"why-has-trump-refused-to-renew-the-usmca-and-what-will-that-mean-explainer-news","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/canada\/113149\/","title":{"rendered":"Why has Trump refused to renew the USMCA, and what will that mean? | Explainer News"},"content":{"rendered":"

The United States has announced that it will not renew a trilateral trade agreement<\/a> covering $1.6 trillion of trade between the US, Mexico and Canada, one day before the agreement was due for its first joint mandatory review.<\/p>\n

A statement from the US trade representative, Ambassador Jamieson Greer, on Wednesday said the US would not agree to renew the trilateral agreement, also known as USMCA, \u201cin its current form\u201d.<\/p>\n

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\u201cThe United States will continue to engage with Mexico and Canada to address the Agreement\u2019s shortcomings and our trade deficits with these countries. However, the Agreement remains in force pending resolution of these issues or until the Agreement\u2019s termination,\u201d the statement read.<\/p>\n

It added that the US will meet Mexico during the week of July 20 for a third round of bilateral negotiations related to the USMCA joint review.<\/p>\n

The US\u2019s decision not to renew the deal comes after US President Donald Trump repeatedly expressed that he did not see the need for the trade agreement.<\/p>\n

In January<\/a>, Trump said that there was \u201cno real advantage to it; it\u2019s irrelevant,\u201d adding last month, \u201cI don\u2019t know that I\u2019m going to renew it.\u201d<\/p>\n

He also signalled that he was open to negotiations with Mexico and Canada, saying, \u201cWe\u2019re talking to them. We\u2019ll see if we do something.\u201d<\/p>\n

Here\u2019s what we know about USMCA:<\/p>\n

What is the USMCA?<\/p>\n

The trilateral deal came into effect on July 1, 2020, during Trump\u2019s first term, replacing the North American Free Trade Agreement (NAFTA).<\/p>\n

According to the US Department of State, the USMCA, created a \u201cmore balanced, reciprocal trade supporting high-paying jobs for Americans and grow the North American economy\u201d.<\/p>\n

It also included chapters covering \u201cDigital Trade, Anticorruption, and Good Regulatory Practices, as well as a chapter devoted to ensuring that Small and Medium Sized Enterprises benefit from the Agreement\u201d.<\/p>\n

But the US\u2019s latest decision will now trigger a six-year review of the agreement under a \u201csunset clause\u201d that Trump negotiated in his first term.<\/p>\n

Without an agreement to amend the deal, the trade agreement will expire on July 1, 2036.<\/p>\n

What is Trump\u2019s criticism of the deal?<\/p>\n

Last month, Trump said of the agreement: \u201cWe don\u2019t need anything that Canada has. We don\u2019t need anything that Mexico has, but they need everything that we have. And they have to treat us better,\u201d he said.<\/p>\n

In advance of the statement, Greer said more time is needed to address problems with the USMCA, which include growing US goods trade deficits with Mexico and Canada, reaching $197bn and $48.3bn respectively in 2025.<\/p>\n

For Canada, which is the US\u2019s largest supplier of crude oil, much of the deficit was driven by oil imports, while, for Mexico, the deficit has grown as companies have shifted their supply chains away from China to Mexico in response to Trump\u2019s tariffs on Chinese-origin goods. This means more goods are recorded as being imported to the US from Mexico.<\/p>\n

Moreover, a Trump administration official told the news agency Reuters that, despite imposing 25 percent tariffs on both Canada\u2019s and Mexico\u2019s car industries, 50 percent tariffs on metals, and 10 percent tariffs on lumber, the president remains sceptical of any deal with the two countries.<\/p>\n

How have Mexico and Canada responded?<\/p>\n

Mexican Economy Minister Marcelo Ebrard told a news conference on Wednesday that his country wants to help address US concerns about job losses and trade deficits.<\/p>\n

\u201cThere is no difference that I can identify between Mexico, the United States and Canada that is so big that we cannot resolve it,\u201d said Ebrard, who joined a virtual meeting with Greer and Dominic LeBlanc, the Canadian minister responsible for US-Canada trade.<\/p>\n

\u201cWe wouldn\u2019t allow our [car-making] industry to be at a disadvantage,\u201d Ebrard said, adding, \u201cI\u2019d say that has been the main point of discussion with the United States in all these talks: protecting our automotive industry.\u201d<\/p>\n

LeBlanc also said Canada would continue to address Trump\u2019s tariffs on his country\u2019s steel, aluminium, cars and lumber.<\/p>\n

\u201cWe agreed on the importance of continuing our discussions and identifying ways to ensure trade and investment frameworks between Canada, the United States and Mexico continue to support North American prosperity and competitiveness,\u201d he said.<\/p>\n

What happens next?<\/p>\n

With Canada and Mexico both open to continuing talks to resolve issues related to the USMCA agreement, which will continue until 2036, for the time being, things will be business as usual.<\/p>\n

Trump could use tariffs to apply pressure during negotiations.<\/p>\n

Alternatively, bilateral agreements could become more important than the trilateral deal; however, they would be unlikely to match the trading strength and volumes under the USMCA.<\/p>\n","protected":false},"excerpt":{"rendered":"The United States has announced that it will not renew a trilateral trade agreement covering $1.6 trillion of…\n","protected":false},"author":2,"featured_media":113150,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[433,17,162,29949,434,3772,388,116,437,30,438],"class_list":["post-113149","post","type-post","status-publish","format-standard","has-post-thumbnail","category-canada","tag-business-and-economy","tag-canada","tag-donald-trump","tag-explainer","tag-international-trade","tag-latin-america","tag-mexico","tag-news","tag-trade-war","tag-united-states","tag-us-canada"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts\/113149","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/comments?post=113149"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts\/113149\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/media\/113150"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/media?parent=113149"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/categories?post=113149"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/tags?post=113149"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}