Trump Just Walked Away From His Own "Best Deal Ever" — And North America's Economy Is Holding Its Breath

The Deal He Once Called Perfect

Six years to the day after it took effect, President Trump let one of his own signature achievements lapse. The US-Mexico-Canada Agreement, the trade pact Trump once called "the fairest, most balanced, and beneficial trade agreement we have ever signed," will not be renewed in its current form — a stunning reversal from the man who negotiated it himself.

A Deadline That Quietly Passed

Wednesday marked the USMCA's mandatory six-year review deadline, built into the agreement specifically so all three countries could reassess whether it was working. Instead of renewing it, U.S. Trade Representative Jamieson Greer announced that Washington would not "rubber stamp" a renewal without first addressing what officials called the deal's shortcomings.

The agreement does not disappear overnight. It remains legally in force while a new, decade-long cycle of annual reviews begins, with the possibility that the U.S. could eventually walk away entirely or split the pact into separate bilateral deals with Mexico and Canada.

The Number Behind the Decision

According to administration officials, the entire dispute comes down to one figure: the trade deficit. A senior official told reporters that when USMCA was adopted, the goal was to modernize trade rules and rebalance the deficits the US runs with its neighbors. The modernization succeeded, the official said, but the rebalancing did not — pointing to deficits that reached $197 billion with Mexico and $48.3 billion with Canada in 2025 alone.

For Canada, much of that gap traces back to oil imports, since it remains America's largest crude supplier. For Mexico, the deficit has actually grown in part because companies have shifted supply chains there specifically to avoid Trump's tariffs on Chinese goods — an unintended side effect of his own trade policy elsewhere.

Canada's Pointed Response

The reaction from Ottawa was measured but unmistakably sharp. Dominic LeBlanc, Canada's minister responsible for U.S. trade relations, said Canada remained "unwavering" in its support for the agreement and was approaching the talks from a position of strength. He added a line clearly aimed at Washington, noting that Canada stood as a stable, reliable partner at a moment of global economic uncertainty — a comment that landed as a subtle rebuke of the country walking away from the table.

Mexico, notably, took a different path. Unlike Canada, it never retaliated against Trump's tariffs, and it remains in active bilateral talks with the White House, with a third round of negotiations scheduled for the week of July 20.

Business Groups Are Nervous, Not Panicked

American industry's reaction has been mixed but wary. The American Automotive Policy Council said North American economic integration delivers real competitive advantages, but argued U.S. automakers remain at a disadvantage compared with importers facing flat tariffs and looser rules of origin, and it called for a swift resolution. The Business Roundtable, representing giants from JPMorgan Chase to PepsiCo, credited the agreement with significant economic benefits and urged the three governments to keep aligning policy rather than let friction grow.

Why Ordinary Shoppers Should Care

The immediate effects on grocery bills and car prices won't be instant, but the uncertainty itself carries a cost. Mexico supplies much of America's fresh produce, and any disruption to established trade rules threatens to ripple through everyday grocery prices. The auto industry, deeply reliant on parts crossing all three borders multiple times during production, is similarly exposed to prolonged ambiguity.

Trade economist Chad Bown pointed to a deeper motive behind the decision beyond the deficit numbers: limiting how much Chinese-made content can enter the American market indirectly through Mexican or Canadian assembly lines, even when the finished product qualifies for USMCA's low tariffs.

Can Trump Actually Walk Away?

Here's the complication nobody in the White House is eager to discuss: Trump likely cannot unilaterally kill USMCA without Congress. A 2020 Senate Finance Committee report explicitly stated the United States cannot withdraw from a congressionally approved trade agreement without lawmakers' consent, and any attempt to bypass that would almost certainly trigger legal challenges that could drag on for years.

Most economists still doubt Washington will trigger a full six-month exit clause, given the roughly $2 trillion in annual trade the pact facilitates and the political cost a rupture would inflict in manufacturing-heavy swing states. But for now, one of the last stable pillars of Trump-era trade policy is officially in limbo — and businesses across three countries are left planning for a decade of uncertainty instead of the stability the deal was designed to guarantee.

Key Takeaways

• The Trump administration will not renew USMCA in its current form, triggering a decade of annual reviews instead.
• The agreement remains legally in force, with a possible full expiration in 2036 if no resolution is reached.
• The dispute centers on trade deficits: $197 billion with Mexico and $48.3 billion with Canada in 2025.
• Canada says it remains fully committed to the deal; Mexico is in active bilateral talks with the U.S.
• Legal experts say Trump likely cannot unilaterally withdraw from USMCA without congressional approval.