USMCA Future Uncertain
President Trump States He Will Not Renew USMCA, Citing Trade Deficits
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Key Points
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Trade-deficit figures cited by Reuters: in 2025 the U.S. ran a $46 billion goods deficit with Canada and a $197 billion goods deficit with Mexico; Reuters also noted that Mexico has been the top U.S. trading partner since 2023, with about 80% of Mexican exports going to the U.S., while nearly 70% of Canada’s exports go to its southern neighbor.
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Canadian Prime Minister Mark Carney met virtually with Canada’s premiers as Trump commented on not seeking renewal, with the Globe and Mail reporting the focus was the “U.S. and the electricity strategy,” including Canada’s pledge to “double electricity generation” in Canada.
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Canadian Trade Minister Dominic LeBlanc sought to downplay the July 1 deadline, telling reporters it is important “not to set up a cliff that doesn’t exist,” and the Globe and Mail added that any of the countries can withdraw from the agreement with six months’ notice.
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Farmers for Free Trade’s Bob Hemesath provided detailed agriculture numbers in response to Trump: he said U.S. agricultural exports to Canada and Mexico grew by $20 billion since USMCA took effect, reaching $60 billion in 2024, and that the two markets now buy roughly one-third of everything American farmers sell abroad; he also said the trade supports nearly half a million American jobs and $149 billion in economic output, while arguing the U.S. imports about 90% of its potash and “more than 80%” comes from Canada with no substitute.
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CTV reported an additional detail on the agreement’s tariff effects: USMCA “has shielded Canadian goods from a large portion of U.S. import tariffs,” even as renewal talks move toward the July 1 review or annual-review path.
President Donald Trump declared on June 10, 2026 that the U.S. is "not looking to renew" the United States–Mexico–Canada Agreement before its July 1 review deadline, according to Reuters. Trump said flatly, "We don't need anything that Canada has. We don't need anything that Mexico has," pointing to a $46 billion U.S. goods deficit with Canada and a $197 billion deficit with Mexico in 2025.
The deal supports roughly $1.6 trillion in annual North American trade. If the three countries don't agree to a 16-year renewal by July 1, the pact shifts into a period of annual reviews — keeping trade alive but raising the risk of slow erosion, according to CTV.
How the USMCA Sunset Clause Actually Works
The USMCA was signed in 2020 to replace NAFTA. It includes a built-in "sunset clause" — a rule that required all three countries to sit down for a joint review on July 1, 2026. If they agree, the deal runs for another 16 years. If they don't, the deal stays alive but must be reviewed every single year until 2036, as Reuters reported.
Canadian Trade Minister Dominic LeBlanc tried to calm fears, telling reporters it is important "not to set up a cliff that doesn't exist." He noted that any country can only exit the deal with six months' notice, according to The Globe and Mail. Still, trade experts warn that years of annual reviews create steady uncertainty — enough to make companies think twice before building new factories tied to cross-border supply chains.
U.S. Farmers Warn of Real Damage to Agriculture
Farm groups fired back quickly after Trump's comments. Bob Hemesath of Farmers for Free Trade said U.S. agricultural exports to Canada and Mexico hit $60 billion in 2024 — up $20 billion since USMCA took effect. The two countries buy about one-third of everything American farmers sell abroad and support nearly 500,000 U.S. jobs, according to Brownfield Ag News.
Hemesath also flagged a specific vulnerability: the U.S. imports roughly 90% of its potash — a key fertilizer — and more than 80% of that comes from Canada with no easy substitute. Losing stable trade terms with Canada could quickly raise food and farming costs across the U.S., he warned.
Canada Pivots Inward While Talks Continue
On the same day Trump made his remarks, Canadian Prime Minister Mark Carney held a virtual meeting with Canada's provincial premiers. The focus was Canada's national electricity strategy, including a pledge to "double electricity generation" at home, The Globe and Mail reported. The move signals Canada is trying to build more self-reliance as the trade relationship grows uncertain.
Meanwhile, formal talks are still moving forward. U.S. and Mexican trade officials are set to meet in Washington on June 16–17, covering agriculture and fair competition rules. A second round is planned for Mexico City around July 20, according to Reuters. Canada formally requested a full 16-year renewal on June 1, but the White House appears more interested in bilateral deals than a clean three-way extension.
Leverage Play or Real Exit? Analysts Are Split
Some trade analysts say Trump's comments are a negotiating tactic — pressure designed to force Canada and Mexico into concessions before any final deal is struck. USTR Jamieson Greer has already signaled the U.S. wants "entry fees" in the form of new rules on dairy and auto parts, according to Claims Journal.
But others see something more serious. Canada and Mexico send 70% and 80% of their exports, respectively, to the U.S. — which gives Washington enormous leverage. The Seattle Times noted the agreement has been central to North American trade for decades. Whether Trump follows through or uses non-renewal as a bargaining chip, the uncertainty alone is already pushing investors and supply chain managers to rethink long-term commitments across the continent.
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