Commerce Secretary Howard Lutnick backed President Trump’s disapproval of the U.S.–Mexico–Canada Agreement on Friday, insisting the deal needs to be renegotiated to better suit American interests.
Speaking at the Semafor World Economy summit in Washington, Mr. Lutnick would not confirm if Mr. Trump is committed to renewing the USMCA but said he does not approve of the deal’s current terms.
“I think he thinks it’s a bad deal. He thinks making Mexico and Canada be treated economically like Georgia and Alabama without them actually being committed … is a bad trick,” Mr. Lutnick said. “I think it needs to be reconsidered and reimagined correctly.”
The USMCA is a duty-free trade agreement covering the U.S., Canada and Mexico. The agreement went into effect in 2020, replacing the North American Free Trade Agreement, a deal slammed by Mr. Trump during his first term.
The president has argued that USMCA does not sufficiently prevent the offshoring of U.S. manufacturing jobs to places like Mexico, where workers receive lower wages.
The agreement governs nearly $2 trillion in annual trade, according to a review by the Center for Strategic and International Studies. The three countries have until July 1 to agree to extend the deal for 16 years or approve a revised plan. If neither happens, a 10-year annual review sunset countdown begins, giving the three countries a chance to renegotiate each year until it expires in 2036.
While some expected the deal’s reapproval to be a nonissue, the Trump administration’s desire to upend America’s position in global trade has complicated matters. The White House has signaled a desire to radically update the terms of the agreement and perhaps replace it with a series of bilateral accords with Mexico.
Mexico, for its part, has overwhelmingly backed the continuation of the USMCA, while Canada has pushed for bilateral agreements alongside its continuation.
In his comments on Friday, Mr. Lutnick signaled growing distaste for the Canadian government.
“There are parts of Canada, you know, their energy and other things that are important to us,” he said. “[Canadian Prime Minister Mark Carney] gets on a plane, and he goes to China. Does he think China’s gonna buy his stuff? China is entirely an export-driven economy. So what did he do? He came back and said, ’Oh, we’ll take their electric cars.’ I mean, is this nuts?”
Mr. Carney has been a critic of the Trump administration’s economic policy for the past year and has made moves to diversify his country’s trade relationships.
After a January visit to Beijing, Mr. Carney announced that Canada would let China sell thousands of electric vehicles in its domestic market in exchange for China dropping duties on canola products. He described the deal as a “preliminary landmark” agreement as the two countries look to deepen economic ties.
• Vaughn Cockayne can be reached at vcockayne@washingtontimes.com.
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