Five Reasons Trump Is Unlikely to Scrap CUSMA, Despite Renewal Threats
U.S. President Donald Trump declared Wednesday he is “not looking to renew” the Canada-U.S.-Mexico Agreement (CUSMA) ahead of the deal’s mandatory review on July 1 — but trade lawyers, industry groups, and Canadian officials say there is little reason to believe he will actually tear up the agreement.
What Trump Said — and What It Actually Means
Speaking in the Oval Office, Trump said the best feature of CUSMA is “the right to terminate” — but stopped short of threatening to do so. The distinction matters: not renewing CUSMA is not the same as ending it.
Even without a formal renewal, the agreement remains in force until 2036. Only a six-month written notice of withdrawal by one of the three signatories would change that.
Trump himself signed CUSMA during his first term, calling it “the most modern, up-to-date, and balanced trade agreement in the history of our country.” He has since dismissed it as irrelevant and floated letting it expire, but has not yet taken the formal step required to exit it.
The July 1 Review: What’s Actually on the Table
July 1 marks six years since CUSMA took effect and triggers a formal review written into the agreement. The three countries face two options: extend the deal for another 16 years, or enter annual reviews until it either expires or a new extension is negotiated.
Canada and Mexico have both indicated they want a full extension and are open to negotiating amendments. The White House has not publicly stated its preferred outcome.
Canadian and Mexican negotiators have long expected the U.S. to push for changes rather than a straightforward renewal — meaning some form of renegotiation was already anticipated regardless of Trump’s latest remarks.
Five Reasons Trump Won’t Walk Away
1. U.S. Industry Doesn’t Want It Scrapped
No major U.S. industry group is calling for CUSMA to be terminated. At a recent House agriculture committee hearing, speaker after speaker urged the administration to extend the deal and warned against scrapping it.
Republican committee chair Glenn Thompson said the agreement has been “extremely beneficial not only to our U.S. farmers, ranchers, foresters and agri-businesses, but also to U.S. consumers and the economy as a whole.” The American Soybean Association — representing the single largest U.S. export crop — is among the groups calling for full renewal.
2. The Economics Don’t Support Withdrawal
There is no credible economic research suggesting that scrapping CUSMA would lower the cost of living for Americans. There is, however, substantial evidence that the U.S. economy has benefited from expanded trade with Canada and Mexico under the agreement.
3. It Isn’t Politically Popular to Kill It
No consistent polling suggests that terminating CUSMA would be a political winner for Trump. Withdrawal would likely trigger economic disruption in key states that depend on integrated North American supply chains.
4. It’s a Negotiating Tactic, Say Trade Lawyers
“Ultimately, this is the modus operandi of the U.S. administration — to really play a tough approach,” said William Pellerin, an international trade lawyer with McMillan LLP in Ottawa.
Mark Warner, a Canadian and U.S. trade lawyer at MAAW Law in Toronto, echoed that assessment. “Trump likes to up the ante and get people riled as part of a negotiating tactic,” Warner told CBC News, adding that Trump’s remarks likely signal a move toward annual reviews — an outcome most observers had already anticipated.
5. The Tone in Bilateral Talks Has Shifted
Behind closed doors, the atmosphere between Canadian and American negotiators appears to have improved significantly from last year’s acrimony. Flavio Volpe, president of the Automotive Parts Manufacturers’ Association and a member of Ottawa’s advisory committee on Canada-U.S. relations, described the current conversations as sounding like “partners that want to work things out and stay together rather than preparing for a permanent separation.”
Canada-U.S. Trade Minister Dominic LeBlanc and chief negotiator Janice Charette met with U.S. Trade Representative Jamieson Greer in Washington last week. LeBlanc confirmed that Canada put formal proposals on the table to address longstanding U.S. concerns, though he declined to provide specifics.
What Canada Still Wants
A central Canadian objective in the talks is relief from Trump’s tariffs on steel, aluminum, automobiles, and softwood lumber. However, Greer has repeatedly signalled that tariffs are here to stay as a condition of U.S. market access — for Canada and all other trading partners.
Trump and Prime Minister Mark Carney are both expected to attend next week’s G7 summit in France, where bilateral trade is likely to feature prominently in their discussions.
