American auto manufacturers are getting uneasy with the end of the USMTA trade treaty. File Photo by Brian Kersey/ UPI | License Photo
The United States will allow a deadline to pass to renew a trade deal for North American automakers.
The U.S.-Mexico-Canada Agreement — negotiated by President Donald Trump in 2020 — is set to expire Wednesday. After Wednesday, the pact will require annual reviews for 10 more years. If they had worked to renew the treaty, it could have been extended for another 16 years. U.S. and Mexican officials are scheduled to have discussions in Mexico City during the week of July 20.
Talks with Canada haven’t started, though relations with the northern country have soured over the past year and a half after Trump began calling Canada “America’s 51st state” and levied tariffs against it.
Industry executives told The Washington Post that U.S. Trade Representative Jamieson Greer is planning a virtual meeting with his counterparts in Mexico and Canada Wednesday.
“Theoretically, they could do this every year for the next 10 years. But I believe the administration wants to get this done by the end of the year,” Dan Ujczo, a trade lawyer in Columbus, Ohio, told The Post.
When Trump announced the USMCA in 2020, he called it “the largest, fairest, most balanced, and modern trade agreement ever achieved.” But since then, he and his administration have changed their minds. Trump wants to bring more manufacturing to the United States and narrow the trade deficit with Mexico, The Post reported. Canada and Mexico also want to avoid Trump’s tariffs.
The deadline to renew the deal is bringing even more uncertainty to the U.S. auto industry, CNBC reported. About 18% of trade with Canada and Mexico last year was in the auto industry. Leaving the pact to expire could create trade uncertainty, which would mean lower investment and fewer jobs.
The auto industry represented about 18% of America’s trading with its neighboring countries last year, according to industry data, making it one of the key sectors in the discussions. Automakers and others watching the talks are concerned that reopening the deal could create additional trade uncertainty that leads to lower investments and fewer jobs.
“If we let this go on for a very long time, it’s very painful for everyone,” Diego Marroquín Bitar, a fellow at the think tank Center for Strategic and International Studies, told CNBC. “That’s the last thing that the region needs.”
In May, a group of U.S. automakers sent a letter to Greer asking him to continue talks to renew the USMCA.
“We support U.S.-Mexico bilateral engagement and encourage trilateral discussions to support an efficient and effective review that will ultimately extend USMCA as a trilateral agreement,” the letter said.China has been bypassing U.S. tariffs by importing American goods through Mexico, which is key to revamping the treaty. And Greer wants sourcing from North America.
“For national security reasons … I want to have our supply chain sourced from this hemisphere … from North America. That’s where we want to have it,” Greer told a Council on Foreign Relations audience in May, CNBC reported.
The White House has defended Trump’s avoidance of the renewal.
“No president has done more to revive the American auto industry than President Trump, who has championed an aggressive agenda of auto tariffs, rapid deregulation, tax cuts, and even a new tax deduction on interest payments for Made-in-USA autos,” Kush Desai, a White House spokesperson, told The Post.
This week in Washington
News anchors are seen outside the Supreme Court of the United States as the court releases their final opinions before summer recess on Tuesday. The court upheld birthright citizenship and also state laws banning transgender women and girls from playing on school athletic teams. Photo by Bonnie Cash/UPI | License Photo
