Trump Says America Is Better Off Without CUSMA as July 1 Deadline Closes In

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Donald Trump has placed the future of North America’s most important trade pact under a fresh cloud of uncertainty. Speaking in France on June 17, the U.S. president said America would be better off without the United States-Mexico-Canada Agreement, even as he left open the possibility of signing an extension. His comments came less than two weeks before the pact’s first mandatory joint review on July 1.

The date is politically explosive, but it is not an automatic expiry point. CUSMA remains in force until 2036 unless a country formally withdraws. What July 1 will reveal is whether the three governments are prepared to lock in another 16 years of stability—or allow annual reviews, tariff disputes and investment anxiety to become the new normal.

Trump Puts His Own Signature Deal in Doubt

Trump’s latest comments are striking because CUSMA was one of the defining trade achievements of his first presidency. The pact replaced the North American Free Trade Agreement and entered into force on July 1, 2020, after a difficult trilateral negotiation. At the time, the White House promoted it as a stronger, more balanced framework for American workers, farmers and manufacturers. Six years later, Trump is publicly questioning whether the United States needs the agreement at all.

“I would rather not have the agreement, but I may sign it,” Trump told reporters in France, before arguing that the country performs better without one. The remark followed an earlier statement that he was “not looking to renew” the pact. That combination—rejection paired with an open door—fits a familiar negotiating approach: create maximum uncertainty, challenge the value of the existing arrangement and preserve room to claim victory if the other parties make concessions. For businesses, however, the ambiguity is not theatre. It affects hiring, sourcing and investment decisions that must be made months or years in advance.

July 1 Is a Review, Not a Shutdown Date

The approaching date is often described as a renewal deadline, but CUSMA does not suddenly vanish at midnight on July 1. Article 34.7 requires Canada, the United States and Mexico to conduct a joint review six years after the agreement took effect. If all three governments confirm that they want it continued, its term can be extended for another 16 years, pushing the horizon to 2042 and scheduling another review six years later.

If unanimous confirmation does not happen, the agreement remains in force and the countries must return for annual reviews through 2036. That creates a long runway for further negotiation, but also a recurring source of uncertainty. A separate clause permits any member to withdraw with six months’ written notice, meaning an abrupt political decision could still produce a much faster break than the 10-year review path. The practical question on July 1 is therefore not whether tariffs immediately return on every product. It is whether North American companies receive long-term certainty or begin operating under a yearly countdown.

The Trade Relationship Is Too Large to Unwind Quietly

CUSMA supports an economic relationship that has become far larger than a conventional trade deal. Annual trade among the three countries is approaching US$1.6 trillion, reflecting decades of factories, farms, rail lines, pipelines and distribution networks built around relatively predictable border access. Mexico has ranked as the United States’ largest goods-trading partner since 2023, while Canada remains one of its two biggest. Together, the two neighbours buy nearly one-third of all goods exported by the United States.

Trump’s argument focuses heavily on deficits. In 2025, the United States recorded goods-trade deficits of roughly US$46 billion with Canada and US$197 billion with Mexico. Yet those figures do not capture how often North American products cross borders during production. A vehicle assembled in Ontario may contain engines, software, steel or electronics produced in several U.S. states, while Canadian energy and industrial inputs support American plants. Removing preferential rules would not simply punish foreign sellers. It could also raise costs for U.S. companies that depend on continental supply chains.

Canada Has More at Stake, but the United States Is Not Insulated

Canada enters the review from a more exposed position. Statistics Canada reported that 71.7% of Canadian merchandise exports went to the United States in 2025, even after that share fell from 75.9% a year earlier. An estimated 1.9 million Canadians—about 9.3% of total employment—worked in industries dependent on U.S. demand in 2024. For communities built around steel, auto parts, forestry, agriculture or energy, trade uncertainty can quickly move from a diplomatic headline to fewer shifts and delayed equipment purchases.

That dependence gives Washington leverage, but it does not make the United States immune. Canada and Mexico are major customers for American machinery, food, vehicles, chemicals and services. Border-state manufacturers frequently rely on Canadian or Mexican components that cannot be replaced overnight without higher costs or production delays. The asymmetry is real: a rupture would likely hit Canada and Mexico harder in proportional terms. Still, the idea that the United States could simply walk away without domestic consequences overlooks the millions of commercial relationships created under more than three decades of continental free trade.

Autos Are Becoming the Hardest Bargaining Table

No industry illustrates North American integration more clearly than autos. Under CUSMA, passenger vehicles and light trucks generally need 75% regional value content to qualify for preferential treatment, up from 62.5% under NAFTA. The agreement also requires automakers to source at least 70% of their steel and aluminum purchases from North America. These rules were designed to pull more production into the region while preserving a supply chain in which parts can cross borders several times before a finished vehicle reaches a showroom.

The next round could be considerably tougher. U.S. negotiators reportedly asked Mexico to accept a requirement that 50% of a vehicle’s content come specifically from the United States, alongside an 82% North American threshold. Canada has not been part of those formal U.S.-Mexico rounds so far. The pressure is already visible in Canadian manufacturing: Statistics Canada found that payroll employment at motor-vehicle-parts producers fell by 5,600, or 7.8%, between December 2024 and August 2025. With auto manufacturing supporting more than 105,000 direct Canadian jobs, even modest rule changes can determine where the next assembly line or battery plant is built.

Farmers Are Warning Against a Rupture

Agriculture may provide the strongest American argument for keeping the pact. Canada and Mexico purchased more than US$58.6 billion in U.S. farm products in 2025, accounting for more than one-third of American agricultural exports. Mexico was the largest market at about US$30.6 billion, while Canada followed at roughly US$28.2 billion. Those sales matter even more as Chinese purchases have weakened amid wider tariff disputes.

Farm organizations are not asking Washington to leave CUSMA untouched. They want a 16-year extension combined with stronger access for genetically modified corn and ethanol in Mexico and expanded dairy access in Canada. U.S. officials have long challenged Canada’s administration of dairy tariff-rate quotas, while corn groups argue that Mexico should not use non-scientific restrictions against biotech products. Still, producers are warning that reform should not become rupture. A Minnesota soybean farmer told Congress that failure to extend the pact would be “catastrophic for U.S. agriculture.” For farms operating on thin margins, a lost export market can mean lower crop prices long before a new buyer is found.

Ottawa Is Focused on Tariff Relief, Not Just Renewal

Canadian officials are trying to lower the temperature around July 1 while making clear that the current tariff fight cannot be separated from the review. Canada’s ambassador to Washington, Mark Wiseman, has described discussions with U.S. officials as productive, respectful and businesslike. He has also argued that Canadians should not treat the review date as an immediate cliff, because the agreement remains legally in force until 2036 unless a party withdraws.

Ottawa’s more urgent objective is relief from U.S. sectoral tariffs affecting steel, aluminum and automobiles. CUSMA-compliant goods generally retain preferential treatment, but those national-security tariffs sit outside the agreement’s normal duty-free structure. Canada has kept counter-tariffs on U.S. steel, aluminum and autos while removing many broader retaliatory measures. The economic drag is becoming harder to ignore: Canadian business capital investment fell for a fifth consecutive quarter in early 2026, and gross domestic product contracted at a 0.1% annualized rate in the first quarter after a revised 1% decline in the previous quarter. For Ottawa, a symbolic extension without tariff relief would leave a major part of the conflict unresolved.

The Real Threat Is a Decade of Uncertainty

The most likely danger is not an immediate return to the pre-free-trade era. It is a prolonged period in which companies cannot be sure what the rules will look like two or three years ahead. If the three governments do not agree to extend CUSMA, annual reviews can continue until 2036. Each one would become another opportunity for tariff threats, new demands and political brinkmanship. That uncertainty carries a cost even when goods continue crossing the border.

A manufacturer deciding where to place a billion-dollar plant cares about more than today’s tariff rate. It needs confidence that parts, energy and finished products will move under stable rules for the life of the investment. The Bank of Canada has treated an extension with limited changes as its base-case assumption, while warning that stricter origin rules or reduced tariff preferences would make trade more expensive. Trump may ultimately sign a revised pact and present it as a stronger deal. Until that happens, his claim that America is better off without CUSMA ensures that July 1 will be remembered less as an administrative review and more as a test of whether North America still wants a shared economic future.

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