It was widely expected within this country that this would happen. President Trump’s preferred approach is to deal with each country separately. This is true whether it is Canada, Mexico or any other country around the world.
U.S. Trade Representative Jamieson Greer has made it official. Delivering an official statement today following a discussion between the United States, Mexico and Canada, USTR Jamieson Greer informed the group the USA will not be renewing the USMCA trilateral trade agreement. [SOURCE]
Not renewing is not the same as withdrawing from the agreement. Some may believe that there is a period of ten years before the trade deal is over. While it is true that negotiations can continue for a period of ten years after non-renewal (with the agreement in force), the fact is that any party can withdraw by giving six months written notice.
Does Canada realize this? Based on their lack of urgency in trade matters with America, it would seem not. President Trump and USTR Greer are moving to complete the bilateral trade discussions with Mexico (noted in the announcement). What happens when that occurs?
Let’s be reminded that Canada’s trade agreements with other countries China in particular, depend on access to the US market. Canada makes very little themselves. They are just a final assembly point to provide access to the American market. This has been a sore point within both Mexico and the United States that want more onshoring of economic development.
The US and Mexico have been working towards a bilateral deal for some 18 months. It is assumed that they are close to a deal with this country. What then? What happens when that occurs? Will the US announce that it is withdrawing from the USMCA and start the six-month, countdown clock?
PDJT has been consistent in announcing to the world that the USMCA trade agreement is something he did not want to retain. The USMCA was just a vehicle to get rid of NAFTA which was a bad deal for this country. The only way he could get rid of NAFTA was to move to the USMCA agreement because Nancy Pelosi would not allow two bilateral agreements to replace NAFTA.
The sunset clauses (non-renewal and withdrawal) were something that the political elite thought would never be activated since PDJT would be gone by the time the calendar arrived to July 1, 2026. Was Trump just lucky?
There is a process at work here that looks something like this. I am indebted to Sundance over at the CTH for this.
- Stage #1 – Announce the non-renewal of the USMCA.
- Stage #2 – Complete the bilateral trade agreement with Mexico.
- Announce the formal withdrawal from the USMCA, trigger the 6-month countdown.
- Stage #3 – Begin negotiating with Canada while the 6-month doomsday clock is ticking. This is optimal leverage.
Nothing here should be a surprise to the bigwigs in the Canadian administration. They know what is coming. Why are they lying to their domestic audience? Let’s be reminded that freedom of the press really does not exist in Canada. The media is unlikely to go against the approved narrative out of Ottawa.
Because of this lack by the media, the Canadian electorate are mad at the USA. They should be angry with their government.
Sundance notes:
For some bizarre reason, and I mean this with great seriousness and sadness, the Canadian people do not comprehend the nature of their economic relationship with the United States.
Canada doesn’t sell 75% of their products to the United States. The United States buys 75% of Canadian products.
The USA is the customer in the relationship. Canada is the seller. The customer holds the leverage in this relationship, not the seller.
The customer is under no obligation to purchase goods from a hostile seller: who ridicules them, belittles them, shouts at them, makes each visit uncomfortable for them, tells them how stupid they are, and is generally abusive to them.
For some unknown reason, Canadians just cannot see the nature of this relationship. There is a very weird abusive psychology behind it, created by the Canadian government.
Where all of this will wind up is anybody’s guess. Will Canadian politicians realize they need to negotiate in good faith now or do they believe they can wait for the next President?