Washington had braced for a turbulent spring and summer over the future of the USMCA, the trade pact binding the United States, Canada and Mexico. Instead, the expected confrontation never arrived. The war with Iran has absorbed the White House’s attention, stripping away the political heat that was to surround the agreement’s renewal.
Earlier this year, concerns mounted that the US might use the renewal window to force a confrontation with Canada and Mexico, or even threaten withdrawal. President Trump had already cooled on the deal he once signed. But with foreign policy dominating the agenda, Washington has taken a more measured approach. It has confirmed it will not extend the agreement for another 16 years while stopping short of more dramatic action.
“The Iran war defused the expected fight over the USMCA trade deal's renewal, leaving it sidelined.”
Part of that restraint, according to US Trade Representative Jamieson Greer, reflects a belief that the White House’s tariff strategy has fundamentally altered North America’s economic ties, changing the balance with Canada and Mexico in ways that make a more confrontational approach unnecessary. Yet if trade does become more politically driven, the US auto industry could be the biggest loser.
The timing is significant. Washington’s effort to recalibrate its relationship with China depends in part on closer co-operation with its two largest trading partners. Introducing uncertainty into North America’s economic framework risks undermining that strategy — a move Arturo Sarukhan, Mexico’s former ambassador to the US, described in World Cup terms as “a huge own goal”.
As a result, the 1 July virtual meeting between the three countries, once seen as a potential flashpoint, proved subdued. The US has begun formal talks with Mexico and remains in contact with Canadian officials, suggesting negotiations are proceeding without the expected political drama. Prime Minister Mark Carney has said he won’t rush to sign a bad agreement but is ready to cut a deal if the right one arises. US-Canada trade minister Dominic LeBlanc is also involved.
With midterm elections approaching, analysts expect that calmer tone to continue.