President-elect Donald Trump’s frequent calls for new tariffs on foreign goods may have overshadowed another massive trade-related pledge he made about a month before the November election: renegotiate the US-Mexico-Canada Agreement.
Known as the USMCA, the first Trump administration negotiated the trade deal and replaced the quarter-century-old North American Free Trade Agreement, or NAFTA, in 2020.
A review of the trade pact was expected in 2026 regardless of Trump’s pledge, due to a requirement in the agreement.
But Trump’s proclamation has put Canada and Mexico—the US’ two biggest trading partners—on notice that he may pursue major changes. The renegotiation could play a major role in the president-elect’s other policy priorities, like national security, immigration, and crime. While the USMCA may not directly deal with those issues, the trade pact could be used as leverage.
“It’s a very functional tool for Trump to achieve whatever it is he’s hoping to achieve by negotiating,” said Francisco Sanchez, who served as undersecretary of commerce for international trade under then-President Barack Obama and is currently a partner at the law firm Holland & Knight.
“The fact that there is a mechanism in place to discuss a review is, I think, to his advantage,” he said.
Since winning the election, Trump has vowed to put tariffs on all goods coming from Canada and Mexico on the first day of his administration unless the two nations stem the flow of illegal immigrants and drugs across the border – which already prompted a phone call from Mexican President Claudia Sheinbaum and a visit to Trump’s Mar-a-Lago resort by Canadian Prime Minister Justin Trudeau.
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