Trump Picks Annual Reviews Over USMCA Renewal
The US declined to renew the USMCA trade deal with Mexico and Canada. Wednesday was the deadline for all three countries to decide the deal's future.
Canada and Mexico both asked for a 16-year extension before the deadline. But the US said no.
Instead Trump chose to keep the deal going through yearly reviews. The USMCA will stay in force until 2036 unless a country pulls out.
Yearly reviews mean the deal can be changed each year. Experts warn this creates big uncertainty for businesses that rely on cross-border trade.
It could also put off long-term investment. Long talks are expected as the US seeks changes to the deal.
The US has already started a third round of formal talks with Mexico. Those talks are set for July 20.
Talks with Canada have not yet started. Relations with Canada are strained over tariffs and Trump's repeated threats about Canadian independence.
Key Terms 4
- USMCA A trade deal between the US, Mexico and Canada
- Annual reviews Yearly checks that allow the deal to be changed each year
- Tariffs Taxes placed on goods bought from another country
- Cross-border trade Buying and selling goods between different countries