A Strategic Reversal

President Donald Trump is privately considering whether to exit the US-Mexico-Canada Agreement (USMCA), the landmark trade pact he signed during his first term. According to sources familiar with the matter, Trump has asked aides for arguments against withdrawing, though he has not yet reached a final decision.

Seeking Tougher Terms

White House and trade officials indicate that the President is keeping his options open while pushing for more stringent conditions. His goals include stronger rules of origin, enhanced labor protections, and more robust safeguards against dumping.

Timelines and Economic Impact

The agreement is subject to a mandatory review by July 1. If renewed, it will remain in effect for another 16 years. If not, the situation could devolve into mandatory annual reviews or a complete U.S. withdrawal following a six-month notice period.

Trump has already ramped up pressure on Canada and Mexico through tariff threats and trade disputes. A U.S. withdrawal would threaten approximately $2 trillion in annual trade and likely trigger retaliatory measures, raising costs for both businesses and everyday consumers.

Leverage vs. Reality

While Trump recently dismissed the pact as “irrelevant,” he has historically praised it as a major achievement. This suggests that the threat of withdrawal may be a tactical move to gain leverage in negotiations rather than a definitive plan to abandon the agreement.