Trump May Leave CUSMA Trade Pact and Make Separate Deals with Mexico and Canada by July 2026

Donald Trump is considering leaving the CUSMA trade deal. This pact covers trade between the US, Mexico, and Canada. It's a big change from the current agreement.
By Newsroom | Business, Politics |

Recent reports indicate former U.S. President Donald Trump is privately exploring the possibility of withdrawing from the Canada-United States-Mexico Agreement (CUSMA), also known as the USMCA. This contemplation includes the potential for negotiating separate, bilateral trade deals with Mexico and Canada, rather than a unified North American pact. The discussions emerge as the agreement faces a mandatory review, scheduled for July 1, 2026, which could lead to its extension or renegotiation.

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Background to the Trade Agreement Review

The CUSMA, which replaced the North American Free Trade Agreement (NAFTA), was a subject of intense negotiation during Trump's first term. Despite being a product of his administration, reports suggest he has since become dissatisfied with the current arrangement. His inquiries about withdrawing from the pact, detailed by sources speaking anonymously, have introduced significant uncertainty into the future of regional trade. A White House official, while not confirming the specifics of internal discussions, emphasized Trump's commitment to securing optimal deals for the American people and characterized discussions about potential actions as speculative prior to any official announcement.

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Evidence of Private Deliberations

Multiple sources point to private discussions where Donald Trump has expressed interest in reconsidering the CUSMA.

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  • Internal Inquiries: Individuals familiar with the matter have stated that Trump has been asking aides about the rationale for not withdrawing from the agreement he previously championed. This questioning, while not a definitive signal of intent, indicates a serious consideration of such a move.

  • Bilateral Deal Exploration: The idea of pursuing separate trade agreements with Mexico and Canada has also been raised. This approach suggests a potential shift away from the trilateral framework, with specific concerns noted regarding the U.S. trade relationship with Canada.

  • Skepticism towards Existing Pact: Reports suggest Trump's perspective on the North American trading relationship has soured. He has expressed that the current USMCA pact is not set in stone, implying a willingness to engage in prolonged economic negotiations or explore alternative structures.

Potential Motivations and U.S. Stance

While specific motivations remain internal, a White House official described Trump as someone always seeking a better deal for the American people. This suggests any consideration of modifying or withdrawing from CUSMA would be framed within the context of enhancing U.S. economic interests. Discussions have also touched on the U.S. potentially leveraging trade concessions. For instance, in exchange for a more reliable supply of critical minerals from Canada, the U.S. might offer trade benefits. Conversely, the U.S. administration has noted that trade ties with Canada are currently perceived as more strained.

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Implications of a Restructured Pact

The potential withdrawal or significant alteration of the CUSMA could have considerable economic consequences.

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  • Disruption of Supply Chains: The existing agreement facilitates duty-free trade for goods originating from Mexico and Canada. Terminating or significantly changing this arrangement could disrupt established production systems relied upon by U.S. manufacturers, potentially leading to longer delivery times and increased operational costs.

  • Tariff Risk: Trump's known preference for tariffs is highlighted as a key risk. Should the U.S. withdraw from CUSMA or fail to reach an extension, exports from Mexico and Canada could become subject to higher tariffs, similar to those applied to goods from other nations.

  • Renegotiation Demands: The process leading up to the current agreement was reportedly tense. A renewed period of complex economic negotiations, potentially on a bilateral basis, could be anticipated, with Canada potentially viewing critical minerals and energy as key bargaining assets.

Expert Perspectives

Experts offer varied viewpoints on the potential outcomes and drivers behind these deliberations.

  • Strategic Re-evaluation: Some analysts suggest Trump's interest in re-evaluating the trade pact aligns with his broader approach to international agreements, which often involves challenging existing frameworks to secure perceived national advantages.

  • Bargaining Leverage: The timing of these discussions, coinciding with the mandatory review, could be interpreted as a strategic move to gain leverage in potential renegotiations.

  • Focus on Bilateralism: The idea of bilateral agreements is seen by some as a way to address specific trade dynamics with each country individually, rather than through a broad trilateral accord.

Conclusion

The reported private discussions surrounding Donald Trump's contemplation of exiting the CUSMA, and potentially restructuring North American trade into bilateral agreements, introduce a period of significant uncertainty. As the agreement heads toward its mandatory July 1, 2026 review, the underlying sentiment appears to be one of potential renegotiation or outright withdrawal. The U.S. administration's stated goal of pursuing optimal deals for Americans, coupled with Trump's past trade policies, suggests a complex and potentially protracted process should these considerations move beyond private deliberation. The extent to which these discussions will translate into formal policy remains to be seen, but they highlight a clear intent to reassess the existing North American trade architecture.

Sources

Frequently Asked Questions

Q: What is Donald Trump thinking about regarding the CUSMA trade pact?
Donald Trump is reportedly thinking about leaving the CUSMA trade pact. He might want to make separate, one-on-one trade deals with Mexico and Canada instead of a big North American deal.
Q: When might changes to the CUSMA trade pact happen?
The CUSMA agreement has a review set for July 1, 2026. This is when the pact could be extended or changed, and it's when Trump's ideas might become more clear.
Q: Why might Donald Trump want to change the CUSMA trade pact?
Sources say Trump feels the current deal is not the best for America. He wants to make sure the U.S. gets the best deals possible, and he might think separate deals will work better.
Q: What could happen if the CUSMA trade pact is changed or left?
Changing or leaving the CUSMA could cause problems for businesses that rely on easy trade between the U.S., Mexico, and Canada. It might also lead to higher prices or taxes on goods.
Q: What are the possible new trade deals Trump might want?
Trump is thinking about making separate trade deals with Mexico and Canada. This means the U.S. would deal with each country individually, instead of having one agreement for all three.
Q: How might this affect trade between the U.S. and Canada?
Reports suggest that trade ties with Canada are seen as more difficult right now. Trump might want to use trade benefits to get things like critical minerals from Canada in exchange for trade deals.