Key facts
- President Donald Trump stated the U.S. would be better off without the USMCA trade agreement.
- Trump indicated he was not looking to renew the agreement.
- The USMCA replaced NAFTA and underpins nearly $1.6 trillion in annual trilateral trade.
- The agreement includes a provision for termination after six years.
- The three North American countries must approve a renewal by July 1 or signal their intention to exit.
U.S. President Donald Trump stated that the United States would be better off without the U.S.-Mexico-Canada Agreement (USMCA) trade deal and preferred not to have a new one. Trump indicated he was not looking to renew the agreement, asserting that the U.S. does not need what Canada or Mexico have, but they need what the U.S. possesses. He added that he was open to discussions with their leaders on the matter, emphasizing a need for better treatment from the two countries.
The USMCA, which replaced the North American Free Trade Agreement (NAFTA), was negotiated during Trump's first term. The agreement includes a provision that allows the United States to terminate it after six years. The three North American countries are required to approve a renewal of the existing agreement by July 1 or signal their intention to exit the pact, a process that would take 10 years.
U.S. and Mexican negotiators were scheduled to hold a second round of talks in Washington on June 16 and 17, focusing on agriculture and "a level playing field." A third set of talks was planned for Mexico City the week of July 20. Canada's minister responsible for Canada-U.S. trade, Dominic LeBlanc, had previously described a meeting with the U.S. on the review of the free trade deal as positive, though no date for formal negotiations between the two countries had been set.
The USMCA underpins nearly $1.6 trillion in annual trilateral trade. In 2025, the U.S. had a $46 billion trade deficit in goods with Canada and a $197 billion deficit with Mexico. Mexico has been the top U.S. trading partner since 2023, with approximately 80% of Mexican exports going to the United States, while nearly 70% of Canada's exports head to its southern neighbor. Mexico and Canada import nearly one-third of exported U.S. goods.
During his first term, Trump had previously imposed a 25% tariff on imports from Canada and Mexico, citing illegal aliens and drugs as an extraordinary threat. These tariffs were paused for 30 days after Canada and Mexico agreed to increase border security, but were later implemented. USMCA-compliant products were then exempted from these tariffs until April 2, 2025.
Separately, Trump commented on Iran's ballistic missile capabilities, stating it would be unfair for Iran not to have some if other countries, such as Saudi Arabia and Qatar, possess them. He also mentioned that the United States would leave its military in the Gulf "for a while" after a deal was struck with Tehran to end a regional conflict.