Why Trump wants to rip up his own trade deal

Six years ago, President Trump signed the U.S.-Mexico-Canada Agreement, calling it "the largest, fairest, most balanced and modern trade agreement ever achieved." Now he says he'd "rather not have" it. The timing is no coincidence: July 1st marks the first review of the USMCA under its built-in sunset clause, and the three countries must decide whether to extend the deal, let it slowly expire, or watch one party walk away entirely.

From NAFTA to USMCA

Before the USMCA, there was NAFTA, the North American Free Trade Agreement that took effect in 1994. It tore down trade barriers between the three countries and sparked a boom in cross-border trade of everything from crops to cars. But it also coincided with a wave of American manufacturing jobs moving overseas. That loss helped drive Trump's first-term criticism of NAFTA as a "lousy deal," and his push to renegotiate produced the USMCA in 2020.

In some ways, the USMCA was an upgrade rather than a reinvention. As the hosts put it, it "didn't so much reinvent the wheel as put some air in the tires and add some rims." It tightened rules on how much of a car must be made in North America to qualify for tariff-free treatment, added a section on e-commerce, and introduced a sunset clause — a "sell by date" set for July 1st, 2026. That date is now the trigger for the current review.

Three Options, One Playground