Trump says he "would rather not have" his North American trade deal
Add Axios as your preferred source to
see more of our stories on Google.
Trump speaks during a bilateral meeting on the sidelines of the G7 Summit today in France. Photo: Anna Moneymaker/Getty Images
President Trump on Wednesday said that he would "rather not have" the North American trade agreement that was negotiated during his first term.
Why it matters: The free trade pact that binds North America is up for review next month. The risk of the deal collapsing now appears greater than before.
What they're saying: "I'm thinking about maybe we won't be able to make a deal. I would rather not have the USMCA," Trump told reporters in Paris, referring to the U.S.-Mexico-Canada trade agreement.
- "I'd rather leave it unsigned, I'd rather have it terminated," the president said — though he added that he "may sign it."
- "We do better as a country if we don't have an agreement."
Between the lines: An implosion of the deal could be disastrous for key industries that depend on the free flow of parts across the northern and southern borders.
- Companies have spent years pouring money into North American-based supply chains to produce goods — including automobiles — for a more affordable price.
The intrigue: The mandatory joint review of the USMCA requires the three countries to decide by July 1 whether to extend the agreement for another 16 years.
- Many expect the nations will blow past that deadline since major talks have so far included only Mexico, without Canada at the table.
- If that's the case, the deal remains in force but automatically enters a period of annual reviews.
Yes, but: The consequences of that would be less severe than a total withdrawal.
- Trump negotiated the USMCA during his first stint in office as a replacement for NAFTA, which connected the three economies in 1994.
- "The primary reason I wanted [the USMCA] was because there was no way out of NAFTA, which was the worst trade agreement ever made," Trump told reporters on Wednesday.
Zoom in: U.S. and Canadian officials have traded harsh words over trade in recent months.
- But Canadian Prime Minister Mark Carney, among the global leaders present at the G7 summit in France, recently called for a "Fortress North America," hinting at the importance of the trade deal.
The bottom line: The USMCA is a major reason Trump's trade war has caused less economic damage than economists forecast, with much of U.S. trade shielded from tariffs under the deal.
- Trump is signaling a willingness to blow up the pact — a sign that economic-related trade risks remain on the horizon.
