The Trump administration is expected to formally announce Wednesday that it will not renew the U.S.-Mexico-Canada trade pact, kicking off a decade-long process to end the North American free trade zone and an agreement President Trump implemented during his first term.
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The USMCA is set to automatically expire on July 1, 2036, unless all three member countries agree to formally renew it for an additional 16 years.
If any country declines the extension, the agreement enters a cycle of annual reviews over the next decade. If all three countries agree to extend the USMCA for 16 years, another review will be scheduled for 2032.
Mr. Trump told reporters earlier in June that he doesn’t plan to renew it.
“I’m not looking to renew it,” the president said. “I made the deal and the primary reason I made the deal is that NAFTA was the worst trade deal I’ve ever seen. And I made it better. But I had the right to terminate.”
Mr. Trump said he plans to let the pact expire because American citizens “don’t need anything” from Canada or Mexico.
“But they need everything that we have to treat us better,” he said of the North American partners. “We don’t need their cars. We don’t need their lumber. We don’t need their energy. We don’t need anything.”
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The heads of trade from the U.S., Canada and Mexico will meet virtually on Wednesday to determine whether they want to extend the pact. Canada has urged the U.S. and Mexico to renew the pact.
U.S. Trade Representative Jamieson Greer has already scheduled a third round of negotiations with Mexico for the week of July 20, suggesting that he would like to see changes in the existing deal.
Mr. Trump’s first administration negotiated the USMCA to replace the 1994 North American Free Trade Agreement, which was established during the Clinton administration. At the time the USMCA was implemented, the Trump administration hailed the deal as “the fairest, most balanced and beneficial trade agreement we have ever signed into law.”
But Mr. Trump quickly turned on the USMCA as the United States’ trade deficit with Mexico grew as companies moved supply chains away from China after he imposed steep tariffs on Chinese products.
Last year, the U.S. had a $46 billion trade deficit in goods with Canada and a $197 billion deficit with Mexico, according to the U.S. Bureau of Economic Analysis.
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