Trump mulls USMCA withdrawal… a pact he designed and signed in his first term

Donald Trump is weighing a U.S. withdrawal from the United States-Mexico-Canada Agreement (USMCA), Bloomberg reported on the 11th (local time), citing multiple sources.

The USMCA was an agreement reached in 2018 during Trump’s first administration among the U.S., Mexico and Canada, and took effect in 2020 after some revisions.

The pact underpins a “high-density” production ecosystem in which supply chains—spanning autos, parts and energy—are tightly intertwined. The value of goods and services moving across borders is estimated at $2 trillion.

Because extensions must be reviewed every six years, this year marks the relevant point. A review to decide whether to extend is scheduled for July 1.

According to Bloomberg, Trump recently asked aides why the U.S. should not withdraw from the agreement he concluded during his first term. He has not, however, gone so far as to definitively signal an intention to exit, the report said.

Following the report, both the Canadian dollar and the Mexican peso weakened.

Trump has taken a negative view of North American trade ties. During a visit last month to a Ford Motor plant near Detroit, he criticized the agreement as “useless.”

The U.S. is said to be pressing Canada and Mexico for additional trade concessions while also applying pressure to address non-trade issues such as immigration, immigration, drug trafficking and defense.

Mexico and Canada, meanwhile, dismissed the report. Mexican President Claudia Sheinbaum, asked by reporters on the 11th about Bloomberg’s story, said, “We don’t believe that report,” adding, “Because this agreement is very important to the U.S. as well, nothing like that has ever been said in our calls.”

Canadian Prime Minister Mark Carney also said on the 10th that he had a “positive” conversation with Trump that included a review of the USMCA, but did not provide details. Dominic LeBlanc’s office, Canada’s minister of international trade with the U.S., also declined to comment on the report.

Yonghyun Shin, Hankyung.com reporter yonghyun@hankyung.com