Trump blows up the ‘best and most important deal ever’

July 2, 2026 — 9:58am

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Donald Trump has, predictably, decided not to renew the trade pact with Mexico and Canada that he negotiated in his first term and previously hailed as “the best and most important deal ever made.”

Now, having decided that his 2020 deal is unfair to the US, he has triggered an exit clause that plunges the US-Mexico-Canada trade agreement (USMCA) into rolling annual reviews over the next decade, unless there is a unanimous agreement by the three countries to change its terms.

“The United States did not agree to renew the USMCA in its current form,” his US Trade Representative, Jamieson Greer, announced on Wednesday, which was the deadline for an agreement to extend the deal for another 16 years, saying the US was not prepared to “rubber stamp” the existing deal because there were “substantial issues.”

Greer said the US would continue to engage with Mexico and Canada, nominating US trade deficits with its two biggest trading partners as the critical issue.

The US had a trade deficit in goods with Mexico of about $US197 billion last year, and a $US46.4 billion deficit with Canada, although the size of the deficits overstates the trade imbalances, given that the calculations don’t include the considerable value added to the countries’ exports that occurs within the US.

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About 30 per cent of the value of Mexico’s exports to the US is estimated to be contributed within the US and about 15 per cent of Canada’s, underscoring how tightly integrated the three countries’ economies are as a consequence of the USMCA and its predecessor, the North American Free Trade Agreement, or NAFTA, which was in place for 26 years before Trump tore it up.

Trilateral trade between the countries amounts to more than $US1.6 trillion ($2.3 trillion), underwritten by complex supply chains that crisscross their borders. In 2020 – when the USMCA was signed – that trade amounted to $US1 trillion. The USMCA has........

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