{"id":737564,"date":"2026-07-01T20:24:25","date_gmt":"2026-07-01T20:24:25","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/737564\/"},"modified":"2026-07-01T20:24:25","modified_gmt":"2026-07-01T20:24:25","slug":"trump-wants-to-ditch-his-signature-trade-deal-its-not-that-easy","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/737564\/","title":{"rendered":"Trump wants to ditch his signature trade deal. It\u2019s not that easy"},"content":{"rendered":"

\n Six years ago<\/a>, President Donald Trump hailed his US-Mexico-Canada Agreement, or USMCA, as the \u201cfairest, most balanced, and beneficial trade agreement we have ever signed.\u201d\n <\/p>\n

\n Now, as the pact is up for review, Trump says he\u2019s ready to abandon it.\n <\/p>\n

\n \u201cI\u2019m not looking to renew it,\u201d Trump said last month. \u201cWe don\u2019t need anything that Canada has. We don\u2019t need anything that Mexico has, but they need everything that we have. They have to treat us better.\u201d\n <\/p>\n

\n That\u2019s not exactly true<\/a>, but even if it were, Trump can\u2019t simply scrap the deal.\n <\/p>\n

\n The USMCA, which replaced the North American Free Trade Agreement<\/a>, facilitates roughly $2 trillion in annual trade among the three neighboring countries. Supply chains \u2014 particularly in the auto industry \u2014 depend on the agreement\u2019s duty-free provisions<\/a>, with parts crossing the US, Mexican and Canadian borders multiple times before a finished vehicle rolls off the assembly line.\n <\/p>\n

\n All three countries are required to review the agreement every six years, and decide whether to renew it or make modifications.\n <\/p>\n

\n After conducting a virtual meeting with trade leaders from Mexico and Canada on Wednesday, the Trump administration failed to reach an agreement, US Trade Representative Jamieson Greer said in a statement. But this doesn\u2019t mean the USMCA will disappear. Instead, the status quo will be maintained and the countries will have to reconvene annually for the next 10 years to negotiate.\n <\/p>\n

\n Senior administration officials signaled an appetite to continue trade talks on a bilateral basis to work out specific issues, such as reducing the trade deficit the United States runs with Mexico and Canada. Trade deficits occur when one country imports more from another country than it exports.\n <\/p>\n

\n While prolonged negotiations won\u2019t significantly impact consumers, they would inject a fresh dose of uncertainty for businesses and disrupt their long-term plans, said Scott Lincicome, a vice president at the libertarian-leaning Cato Institute.\n <\/p>\n

\"A<\/p>\n

\n Withdrawing from the deal altogether is an option, too. But it\u2019s complicated. The earliest it could happen is six months from now, per the terms of the agreement.\n <\/p>\n

\n And there\u2019s also the question as to whether Trump would have the authority to do so without congressional approval. In a 2020 USMCA report<\/a>, the Senate Finance Committee said that \u201cThe United States cannot withdraw from a congressionally approved trade agreement without the consent of Congress.\u201d Such a move would almost certainly face legal challenges and draw out the process even longer, Lincincome said.\n <\/p>\n

\n But senior administration officials said on Wednesday that the extent to which they need a green light from Congress \u201cdepends on the nature of the results of these negotiations.\u201d\n <\/p>\n

\n For instance, if one country committed to lowering trade barriers as part of an agreement, congressional approval wouldn\u2019t be needed, they argued. \u201cWe only have to have something approved by Congress if we\u2019re changing a US law.\u201d\n <\/p>\n

\n Legality aside, economists and trade experts by and large aren\u2019t expecting a withdrawal, given what\u2019s at stake for the United States.\n <\/p>\n

\n In addition to straining US relations with two of America\u2019s top trading partners, \u201cWe\u2019d see chaos, stock market gyrations,\u201d Lincicome said, likely accompanied by higher prices and shortages as supply chains adjust to higher tariffs.\n <\/p>\n

\n The Trump administration is less likely to attempt the nuclear route right now, Michael Pearce, chief US economist at Oxford Economics, said in a recent note. Trump\u2019s favorability is already under pressure<\/a> as a result of the rise in gas prices and midterm elections are around the corner.\n <\/p>\n

\n \u201cThere\u2019s only a slim chance that the Trump administration would trigger the six-month exit clause and pull out of the USMCA entirely, given the prohibitively large costs this would impose on US investment and trade, particularly in key swing states in the Midwest.\u201d\n <\/p>\n","protected":false},"excerpt":{"rendered":"Six years ago, President Donald Trump hailed his US-Mexico-Canada Agreement, or USMCA, as the \u201cfairest, most balanced, and…\n","protected":false},"author":2,"featured_media":737565,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18],"tags":[23,3,21,19,22,20,25,24],"class_list":["post-737564","post","type-post","status-publish","format-standard","has-post-thumbnail","category-united-states","tag-america","tag-news","tag-united-states","tag-united-states-of-america","tag-unitedstates","tag-unitedstatesofamerica","tag-us","tag-usa"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/737564","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=737564"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/737564\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/737565"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=737564"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=737564"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=737564"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}