The President of the United States, Donald Trump, has scorned the United States-Mexico-Canada Agreement (USMCA), which he himself signed during his first term. In 2020, he said it was the best trade deal ever signed. Six years later, he wants to reform it because he believes it is not advantageous enough for his country. “I don’t care, the truth is I don’t want to do it. I prefer to be independent,” he said in an interview on the conservative channel Fox News when asked if he was willing to renew the trade agreement. “Mexico needs us, Canada needs us. We don’t need them. The agreement is important for them. It’s not important for us,” the president added during his appearance on a live television program.
Trump’s words come amid the review of the treaty that regulates trade between the three North American countries worth 1.8 trillion dollars, according to the United States Trade Representative (USTR). The agreement signed in 2020 provided for an update after six years. That deadline coincides with the commercial offensive of the U.S. president, obsessed with erecting a tariff wall with the rest of the world.
In this context, Washington seems reluctant to renew the USMCA under the current conditions. It wants greater advantages for its automotive sector and is putting Mexico and Canada in a tight spot.
Meanwhile, the United States approved last week a new batch of tariffs ranging from 10% to 12.5% for 60 economies that violated import control rules in forced labor territories. Among the affected countries were Canada and Mexico, which will face a new customs levy on products not included in the USMCA.
Meanwhile, bilateral negotiations on the trade agreement continue. While Washington and Mexico seem to have aligned and are making progress on a new framework, things appear different with Canada, where distrust of Trump’s policies is growing.
“What we are looking for are better conditions for Mexico and that there will be no new tariff, that there are no surprises of new tariffs in this new framework that exists to provide guarantees to investors,” said Mexico’s president, Claudia Sheinbaum, after learning about Trump’s latest trade salvo.
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The United States wants cars assembled in all North American plants to have more parts from U.S. manufacturers. Additionally, it wants to reduce the number of components imported from outside the region, to impose new restrictions on China and Europe.
The automotive sector is crucial for Trump. Precisely this Monday, he traveled to Milford (Michigan), where General Motors (GM) has its testing plant, to deliver a speech highlighting his supposed economic successes. “We are building more plants than anyone else in the world and, frankly, all the businesses are moving here,” he said after watching a car race. “Many of these car businesses left here for foreign countries. They went to Germany, Mexico, and Canada, to Japan, to South Korea. Now they are coming back home, where they belong,” he said.
In Mexico, the U.S. president’s words are interpreted as a commercial strategy to gain advantage in the USMCA negotiations.
“My policy is simple: if you manufacture your truck or car in a foreign country, you have to pay for the privilege of sending it to our market and making a lot of money,” he said Monday in Michigan. “But if you build in a factory in Michigan or somewhere in our country and manufacture your cars or trucks right here in the United States, you pay no taxes, zero tariffs. You pay 0% tariff,” he said to an enthusiastic audience.
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