The United States is expected to formally declare its exit from the US-Mexico-Canada Agreement (USMCA) on Wednesday, starting a decade-long countdown for the trade pact. This move is part of a sunset clause negotiated by the Trump administration.
Background
The USMCA is a trade agreement between the United States, Mexico, and Canada that replaced the North American Free Trade Agreement (NAFTA) in 2020. However, the US has been seeking changes to the agreement, including increased US content in North American-built vehicles and trade protections to block Chinese goods from benefiting from USMCA.
Trade chiefs from the US, Mexico, and Canada are expected to meet virtually on Wednesday to discuss the future of the agreement. The US has already scheduled a third round of negotiations with Mexico for the week of July 20.
Implications
The exit from USMCA could have significant implications for trade between the three countries. The US is seeking to boost US content in North American-built vehicles, which could lead to increased tariffs on vehicles assembled in Mexico and Canada.
A Mexican official said that Mexico and the US broadly agree on the problems with USMCA, including the decline of US manufacturing jobs and the increase in Asian parts in North American-built vehicles. However, the two countries are still discussing how to address these issues.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
