U.S. Trade Representative Jamieson Greer hinted at the possibility of the Trump administration withdrawing from the United States-Mexico-Canada Agreement (USMCA) in 2026.
USMCA Could Split Into Two Deals
Greer suggested that President Trump might decide to pull out of the USMCA next year, despite the deal’s text advocating for members to remain until at least 2036.
For a podcast episode to be aired on Friday, Greer told POLITICO White House Bureau Chief Dasha Burns that the review period built into the USMCA was intended for potential revisions, reviews, or exits.
Greer also suggested negotiating with Canada and Mexico separately, potentially breaking the deal into two parts. He pointed out the distinct labor conditions, manufacturing dynamics, and trade profiles of the two countries.
The trade representative noted that Trump's push to bring manufacturing jobs back to the U.S. has already had consequences for Ontario's auto industry.
The White House did not immediately respond to Benzinga‘s request for comment.
Trump Wants To Let USMCA Expire
Meanwhile, on Wednesday, when a reporter asked Trump for his position on renegotiating the USMCA, Trump said, “We’ll either let it expire, or we’ll maybe work out another deal with Mexico and Canada.”
“Mexico and Canada have taken advantage of the United States like just about every other country,” he added.
USMCA’s Fate Hangs In Limbo
The USMCA, signed by Trump in 2020, replaced the North American Free Trade Agreement (NAFTA) and has been a key trade achievement of his first term.
The Office of the United States Trade Representative (USTR) opened a pivotal hearing on Wednesday on the future of the USMCA, with U.S. agriculture, business, and policy groups strongly urging the Trump administration to keep the pact intact.
As part of the government's review ahead of the 2026 renewal deadline, several industry participants stressed that USMCA's free-trade framework has boosted revenues by ensuring reliable access to Canadian and Mexican markets, reported Canada’s CBC News. Their testimony will help shape the administration's decision on whether to renew, renegotiate, or withdraw from the deal by July 1, 2026.
Federal law requires the USTR to submit its recommendation to Congress by January 2 on whether to renew the trade agreement or pursue another course of action.
US-Canada Trade Talks Stalled
The USMCA has faced challenges over the past few months, with the Trump administration imposing and later reducing tariffs on Canada and Mexico. The agreement has also been a point of discussion for the American auto industry’s competitiveness, with Canadian Prime Minister Mark Carney stressing its importance during a meeting with Trump.
In October, Canada was seeking sector-specific trade deals with Trump, especially on steel, to stabilize its economy as U.S. tariffs strain the Canadian steel industry. Industry Minister Mélanie Joly warned that delays could lead to plant closures and stressed the urgency of short-term relief. However, later that month, Trump abruptly halted broader trade talks after reacting to a Canadian ad criticizing his tariffs.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
