According to media reports, Trump is privately assessing the possibility of withdrawing from the US-Mexico-Canada Agreement, injecting uncertainty into the key review on July 1. Current negotiations show a bilateral divergence: Mexico is pragmatic, while Canada is challenging. This move may aim to pressure both Canada and Mexico to make concessions in areas such as immigration and drug control. If the agreement collapses, it will rebuild tariff barriers, drive up inflation, and impact midterm election prospects. Analysts believe that the threat of withdrawal is more likely a negotiating tactic rather than the ultimate goal.
According to media reports, U.S. President Trump is reportedly assessing the possibility of withdrawing from the United States-Mexico-Canada Agreement (USMCA) by privately consulting with his advisors. This news has injected significant uncertainty into the ongoing renegotiations between the U.S., Canada, and Mexico, casting a shadow over the agreement that covers approximately $2 trillion in trade and services.
According to CCTV News, on December 3, 2025, U.S. President Trump stated that either the USMCA would expire, or a new agreement would be reached with Mexico and Canada. Additionally, Trump noted that Mexico and Canada have been taking advantage of the U.S., while tariffs are bringing wealth to the country.
Sources familiar with the matter revealed to the media that Trump has asked his aides why he should not withdraw from the agreement, although he has not yet issued a clear direct signal of withdrawal. White House officials responded by stating that Trump is the ultimate decision-maker and remains committed to securing better deals for the American people, adding that discussions about potential actions remain speculative until the President makes an official announcement. Meanwhile, officials from Jamieson Greer's office at the U.S. Trade Representative stated that merely approving the terms from 2019 does not align with national interests, and the administration intends to retain all options for Trump to address established issues.
The current state of negotiations reflects diverging dynamics. In an interview, Jamieson Greer pointed out that talks will proceed bilaterally, characterizing the Mexican side as currently “quite pragmatic,” while describing discussions with Canada as “more challenging.” This indicates that trade relations among the three countries are becoming increasingly complex as the mandatory review deadline of July 1 approaches.
Any move to withdraw from the agreement would shake the foundation of one of the largest trade relationships globally; even the threat of withdrawal is enough to unsettle investors and world leaders. If the agreement collapses, it would not only reinstate tariff barriers and exacerbate inflationary pressures but could also reverse three decades of efforts to integrate supply chains across North America, triggering economic ripple effects ahead of the upcoming midterm elections and presenting the Republican Party with more severe challenges. Oil prices surged over 2% intraday due to this news.
Approaching Review Deadline and Bilateral Negotiations
The USMCA is facing a mandatory review scheduled for July 1, a process originally considered routine but now evolving into a contentious negotiation. If the three countries agree to renew, the agreement will remain valid for another 16 years; if no consensus is reached, it will trigger an annual review mechanism lasting ten years until its expiration in 2036. Any country may withdraw with six months’ notice.
Officials from Jamieson Greer’s office stated that if a solution incorporating input from industry stakeholders can be achieved, Greer would recommend renewing the agreement. Potential areas of focus include strengthening rules of origin for key industrial products, deepening cooperation on critical minerals, enhancing worker protections, and implementing anti-dumping measures.
Trump has demanded that Ottawa and Mexico City make further concessions beyond trade, pressuring them to address unrelated issues such as immigration, drug trafficking, and defense. Trump publicly expressed his desire for Canada and Mexico to thrive but bluntly remarked, “The issue is we don’t need their products,” hinting at a preference for negotiating through bilateral agreements.
Canada Faces a 'More Challenging' Situation
Trump has recently increased pressure on Canada and Mexico, particularly targeting Canada. According to Xinhua News Agency reports, he threatened to impose a 100% tariff on Canadian goods; if Canada does not approve certain Gulfstream jets, the tariff on Canadian aircraft will be raised to 50%. Additionally, he refused to open a new bridge connecting Ontario and Michigan.
Canadian Prime Minister Mark Carney stated that he had a "positive" call with Trump on Tuesday to discuss the bridge threat and USMCA review issues. However, tensions between the two countries remain high. Last month, Carney, speaking at the World Economic Forum in Davos, called for middle powers to forge new alliances to counter economic coercion by superpowers and referred to the old rules-based international order as a "fiction," which angered Trump. Moreover, Trump's remarks about NATO troops not being on the front lines in Afghanistan also sparked public discontent in Canada, with some Canadians even boycotting American products as a result.
By contrast, the U.S. Trade Representative views Mexico as more pragmatic in negotiations, although Trump has also vowed to impose tariffs on Mexican products shipping oil to Cuba.
Tariff Risks and Inflation Concerns
If the U.S. withdraws from the United States-Mexico-Canada Agreement (USMCA), it could immediately trigger economic pain, subjecting more Mexican and Canadian exports to higher U.S. tariffs. Currently, most goods traded under the agreement, except for specific exceptions like automobiles, are exempt from Trump’s global tariffs. According to 2024 trade data, Mexico and Canada are the top two trading partners of the U.S. and the largest buyers of American goods.
American business groups and lawmakers would almost certainly oppose withdrawal from the agreement. The prospect of higher tariffs would exacerbate inflation and affordability concerns, a sensitive topic ahead of the November midterm elections. If withdrawal triggers retaliation from Canada and Mexico, it could hinder Trump’s campaign promise to boost U.S. exports.
Trump's Negotiation Strategies and Attitudes
Trump frequently consults key aides on various issues, and while these inquiries may reflect his thinking, they do not necessarily predict final actions. It is unclear whether Trump would publicly threaten withdrawal or formally issue a warning. Analysts believe that if he takes this step, it would likely be used as leverage to secure a more favorable deal rather than an actual intention to withdraw the U.S. from the agreement.
Despite being one of the negotiators of the agreement, Trump's perspective on North American trade relations has shifted. According to media reports, during a visit to a Ford Motor plant near Detroit, he described the agreement as “irrelevant,” though he did not explicitly state an intention to withdraw. This unpredictability has become a hallmark of Trump’s second term, leaving global leaders uncertain. While he has threatened to impose tariffs on North American steel and aluminum, he has also shown willingness to retain much of the USMCA, particularly the tariff exemption mechanism following warnings from the automotive industry.
Editor/Doris
