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In a familiar twist in trade negotiations, U.S. President Donald Trump has labelled the United States-Mexico-Canada Agreement (USMCA) as “irrelevant,” hinting at a potential pivot towards bilateral agreements with Mexico and Canada. This shift comes ahead of the agreement’s mandated review later this year, igniting concerns in Ottawa about a repeat of past tactics that could leave Canada sidelined.
Revisiting Old Strategies
Trump’s rhetoric is reminiscent of strategies employed during his first term, when he frequently targeted Canada in trade discussions. After deriding the North American Free Trade Agreement (NAFTA), he announced a bilateral deal with Mexico in August 2018, effectively sidelining Canada. “If we don’t make a fair deal for the U.S. after decades of abuse, Canada will be out,” he tweeted, signalling a tough stance that pressured Canada into negotiations.
The stakes are once again high as Trump appears to be reviving this approach, with U.S. Trade Representative Jamieson Greer noting that the President might consider withdrawing from the USMCA in 2026 if the terms are not favourable. Greer’s comments highlight a strategy that seeks to manipulate the relationship dynamics between the U.S., Canada, and Mexico.
Canada’s Position: A Delicate Balancing Act
Historically, Canada has found itself at a disadvantage in these negotiations. Back in 2018, the tactical manoeuvres of Mexican officials effectively outpaced Canada’s efforts, leading to a less favourable outcome for Ottawa. Ian Bremmer, a political risk analyst, observed that Mexico is currently aligning closely with the U.S., eager to address American demands, which further complicates Canada’s negotiating position.
Nevertheless, Canada does have some protective measures in place this time around. Both Canada and Mexico are part of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which excludes the U.S. This multilateral framework could provide Canada with alternative avenues for trade and economic collaboration, should negotiations with the U.S. falter.
A Canny Response from Canada
Prime Minister Mark Carney appears to be taking a more measured approach in response to Trump’s latest threats. He has shunned public negotiations, understanding the pitfalls that come with such visibility. By maintaining a low profile, Carney aims to avoid the traps of public diplomacy that have historically favoured the U.S. narrative.
As the USMCA discussions continue, Canadians can expect a renewed barrage of threats from the Trump administration, particularly targeting key sectors such as automotive, dairy, and digital services. Previous patterns suggest that Trump could resort to tantrums aimed at undermining the dispute-settlement mechanisms within the agreement, further complicating Canada’s position.
Why it Matters
The resurgence of Trump’s aggressive trade tactics poses significant challenges for Canada as it navigates its relationship with both the U.S. and Mexico. With the potential for bilateral agreements that could marginalise Canada, it is crucial for Ottawa to remain vigilant and strategic. The outcomes of these negotiations will have lasting implications on trade dynamics in North America, impacting everything from economic stability to the livelihoods of countless Canadians. As the drama unfolds, it is vital for Canadian leaders to stay engaged and proactive, ensuring that the nation’s interests are firmly represented on the continental stage.
