Trump Administration Opts for Annual USMCA Reviews, Not Renewal

The Trump administration has decided not to renew its trilateral trade pact with Canada and Mexico, instead opting to conduct annual reviews of the treaty that President Donald Trump once called "the best agreement we've ever made."

The widely anticipated decision on the United States-Mexico-Canada Agreement, known as USMCA, was revealed Wednesday, the deadline for the three North American trade partners to determine whether they would renew their agreement for another 16-year term.

The decision means the USMCA will stay in effect for another decade, provided no member tries to withdraw from it. But it also triggers yearly reviews that could result in the renegotiation of major parts of the treaty.

Trump "chose not to rubber stamp a USMCA renewal without addressing existing issues," a senior administration official told reporters in a call announcing the move.

"In other words, the United States did not agree to renew the USMCA in its current form," the official said. "So, as a result, the USMCA is not renewed."

Trump's "primary" concern with USMCA centers on the U.S.'s trade deficits with the two trading partners, according to the official.

When the new deal came into effect in July 2020, Trump touted it as "the fairest, most balanced, and beneficial trade agreement we have ever signed into law."

But Trump's enthusiasm for USMCA has recently waned, coinciding with mounting strain on the U.S. relationships with its two neighbors.

"I don't know that I'm going to renew it," Trump said of USMCA in June. "We don't need anything that Canada has. We don't need anything that Mexico has, but they need everything that we have. And they have to treat us better."

Trump has long complained about the U.S. sustaining trade deficits with its economic partners. Seeking to address that perceived unfairness and force other policy changes, Trump in his second term imposed a series of tariffs on nearly every country, including Mexico and Canada.

Trump's tariff regime has since been stymied by court losses.

The U.S. and Mexico had already begun a series of bilateral negotiations that are scheduled to continue past the July 1 deadline date. The U.S. and Canada have not started their own talks, however.