COMMENTARY: USMCA and Trump — When Commercial Isolationism Threatens Midwest Farms

A historic date turned into a missed opportunity

July 1, 2026 marks the sixth anniversary of the entry into force of the United States-Mexico-Canada Agreement (USMCA), the trade deal that Donald Trump himself negotiated during his first term to replace NAFTA. Under Article 34.7 of that agreement, the three governments were required to meet and decide whether to extend the accord for 16 additional years, which would have fixed it through 2042. Instead, July 1, 2026 became a missed checkpoint: the three countries met virtually to acknowledge that no consensus would be reached in the near term, triggering a process of annual reviews extending potentially through 2036.

The reason for this failure? Trump himself. In June 2026, at the G7 in France, he stated clearly that he "would prefer the agreement to be terminated" and that he "would prefer not to sign." A week earlier, in the Oval Office, he had said he was "not looking to renew" the deal. Meanwhile, Canada and Mexico both formally requested a 16-year extension. It is Washington — and Washington alone — that is blocking. This is the paradox of a president who claims to defend American interests by sabotaging an agreement he himself designed to defend those very interests.

USMCA does not expire — but the uncertainty itself is very costly

Let us be clear about what July 1, 2026 means technically: USMCA does not disappear. Under its own Article 34.7, if the three parties do not agree on a 16-year extension, the agreement remains in force under its current term through 2036, with annual reviews. Preferential tariffs stay in place. North American supply chains continue to function. But the regulatory uncertainty created by Trump's statements is itself a real economic cost. Companies that must decide on five- to ten-year investments in North American production capacity cannot afford to plan in an environment where the rules of the game could change every year.

The Center for Strategic and International Studies (CSIS) has identified six possible scenarios for USMCA — from best case (16-year extension) to worst case (unilateral American withdrawal with six months' notice). The most likely scenario, according to analysts, is a prolonged annual review process lasting several years, during which the United States seeks to renegotiate certain provisions (automotive content, rules of origin, Canadian agricultural market access) without going all the way to withdrawal. This is trade policy by uncertainty — a characteristic technique of the Trump approach.

There is something deeply absurd about this situation: Trump wants to "terminate" an agreement he himself negotiated, signed with pride, and that bears his political mark. The incoherence would be comical if its economic consequences for American farmers and North American industries were not so real. But in Trump's politics, consistency is not a value — the spectacle of perpetual negotiation is a value in itself.

The world's largest free trade agreement

USMCA governs $1.9 trillion in annual trilateral trade in 2026 — an increase of 32% since the agreement entered into force in 2020, according to Canadian Trade Minister Dominic LeBlanc in his letter to US Trade Representative Jamieson Greer dated June 1, 2026. It is the world's largest free trade zone, covering 500 million people and approximately 30% of global GDP.

The agreement has deeply integrated supply chains across the three countries, particularly in the automotive, agri-food, and manufacturing industries. A vehicle manufactured in the United States may cross the Canadian and Mexican borders multiple times during production — the engine built in Michigan, the electronics in Mexico, final assembly shared across several states and provinces. This integration creates economic efficiency — and vulnerability to regulatory disruption.

American farmers: the most exposed, the least heard

What Trump appears unwilling to acknowledge is that American farmers are the primary beneficiaries of USMCA — and those who will suffer most from any breakdown of the agreement. Canada and Mexico are together the two largest export markets for American agriculture, buying more than a third of US agricultural exports combined. According to Guy Allen, senior economist at Kansas State University, cited by the High Plains Journal (June 26, 2026), Trump says himself that the United States "doesn't need anything Canada or Mexico produces" — even as both countries are the primary buyers of what American farmers produce.

The House Agriculture Committee has signaled broad bipartisan support for keeping USMCA in place. Agricultural associations representing hundreds of thousands of soybean, corn, wheat, pork, beef, and poultry producers — predominantly from Republican Midwest states — have expressed their concerns directly to the White House and Congress. These farmers do not want to lose their preferential access to Canadian and Mexican markets on the altar of a negotiating posture that primarily serves Trump's political agenda.

I find this situation politically revealing: the Midwest farmers who voted for Trump are precisely the ones who could suffer most from his trade policy. This is not a new paradox — it is the repeated pattern of populist politics: promising protection to ordinary workers while pursuing policies that expose them further. The difference here is that Midwest farmers have enough organized lobbying to make themselves heard. The question remains whether Trump listens.

Automobiles and rules of origin: Washington's real agenda

The formal US-Mexico negotiations are unfolding in three rounds planned for May, June, and July 2026. What the Trump administration is seeking is not the abolition of USMCA — it is its renegotiation on several specific points: stricter rules of origin in the automotive industry to force a higher share of US production, adjustments in the Canadian dairy sector (the question of Canadian tariff rate quotas protecting Quebec dairy farmers), and a stronger enforcement framework in Mexican industrial zones.

These demands have partial economic logic — but implementing them would force treaty revisions that Canada and Mexico will resist. Canada has made clear that Prime Minister Mark Carney intends to negotiate a 16-year extension with targeted improvements — an approach that acknowledges some partial renegotiation may be acceptable, but refuses the scenario of an expiring treaty or a fragmented bilateral relationship.

Mexico: the partner Trump underestimates

Mexico is the most exposed partner in this dynamic — its economy is deeply integrated with the American economy, with approximately 80% of its exports going to the US market. But Mexican Economy Secretary Marcelo Ebrard has shown surprising firmness in the negotiations, refusing to allow bilateral US-Mexico discussions to dictate the terms of the trilateral agreement. His position is clear: USMCA is a trilateral agreement and must remain trilateral — not a series of bilateral deals that Washington can manipulate independently.

This Mexican resistance is symbolically important. It means Trump's strategy of divide and conquer — treating Canada and Mexico separately to extract concessions from each — is harder to apply than in his first term, when NAFTA was renegotiated under pressure. Both partners learned lessons from 2018–2020 and are better coordinated to preserve the trilateral architecture of the agreement.

There is a certain irony in the fact that Mexico — often presented as the junior partner in the agreement — is today more firm in defending the trilateral architecture than the United States is in defending its own creation. Ebrard understood what Trump has not yet accepted: in a three-party trade agreement, you cannot extract concessions from both others by ignoring them alternately. The economic geography of North America does not allow it.

Republican farmers quietly push back

In Washington, the internal resistance to Trump's USMCA posture comes from his own Republican Congressional allies. The House Agriculture Committee has expressed bipartisan support for agreement renewal. Republican senators from Nebraska, Kansas, and Iowa — states heavily dependent on agricultural exports to Canada and Mexico — have contacted the White House to express their concerns. This is not yet open rebellion, but it is a signal that the concrete economic interests of their constituencies weigh more heavily than ideological loyalty to commercial isolationism.

The constitutional question is also at play: several legal analysts, including those at the Brookings Institution, argue that Trump cannot withdraw the United States from USMCA without a Congressional vote — an unresolved question. This legal uncertainty adds another layer of uncertainty for businesses trying to plan long-term North American investments.

American industry: more organized resistance than in 2018

The US Chamber of Commerce has run an active lobbying campaign on Capitol Hill for USMCA renewal, according to Politico (June 26, 2026). Industry groups representing automotive, agri-food, retail, and financial services sectors — all of which benefit from North American economic integration — have coordinated their pressure on lawmakers from both parties. This mobilization is more organized and better coordinated than during the 2018–2020 renegotiation, in part because companies directly bore the costs of the trade wars of Trump's first term and do not want to repeat the experience.

The automotive sector is particularly vocal. North American automotive supply chains are integrated to a degree that makes separation economically catastrophic. According to industry estimates cited by the Center for Strategic and International Studies, reverting to standard commercial tariffs on Mexican auto imports would cost the American automotive industry billions of dollars in production overruns and force a massive reorganization of supply chains built over 30 years of gradual integration.

Trump can say he "would prefer to terminate" USMCA as much as he wants. What matters is what companies, farmers, and Republican legislators from his own camp are telling him in private. And what they are saying is: "Don't do it." The pressure is real, even if it is expressed quietly. The real question is whether Trump, as in the past, will use this pressure to extract symbolic concessions and then claim a renegotiation victory. That is his operating mode. It is not really trade governance — it is theater.

Carney's "Make CUSMA Great Again" strategy

Canadian Prime Minister Mark Carney has adopted an approach that borrows, not without irony, from Trump's own rhetoric: his goal is to make CUSMA (Canada's name for USMCA) "great again" in Trump's eyes — by showing how the agreement serves American interests and can be improved to serve them even better. According to Policy Magazine (June 26, 2026), Carney has held direct bilateral meetings with Trump and is convinced that a deal between the two leaders is ultimately the path that will work.

This approach is politically skillful — it meets Trump where he is rather than confronting him directly. But it has a cost: it implies making concessions on certain aspects of the current agreement to secure an overall extension. Which concessions? That is where details are lacking. The Canadian dairy sector, jealously protected by Quebec, could be the main bargaining chip. That is politically sensitive for Carney domestically — but perhaps less so than the prospect of a US-Canadian commercial relationship regularly destabilized by Trump's political moods.

$1.9 trillion at stake: two economies too integrated to separate

The fundamental economic reality is simple: the American, Canadian, and Mexican economies are too integrated for an orderly separation. US-Canada bilateral trade alone represents more than $800 billion per year. The Canada-US border is the world's longest international boundary, with dozens of bridges, tunnels, and ports of entry through which hundreds of billions of dollars in goods flow annually. Interrupting or subjecting that flow to high tariffs would not eliminate trade — it would simply raise its costs, reducing competitiveness on both sides of the border.

The Scowcroft Group analysis published by Policy Magazine (June 23, 2026) is direct: even if negotiations extend beyond 2026 — which is now certain — the agreement will remain in force. The real threat is not the immediate expiration of USMCA, but the annual uncertainty cycle that chills long-term investment in North American integration. This is a diffuse, silent, and cumulative cost — exactly the kind of cost that populist policies never tally on their balance sheets.

Carney is right to take Trump seriously rather than treating him with contempt. That is the lesson European leaders learned the hard way in 2017–2020: direct confrontation with Trump does not work. Showing him how he can "win" in a renegotiated deal works better. It is humiliating for traditional diplomacy. It is effective. And in international affairs, effectiveness trumps dignity when the economic stakes are this high.

Section 232, 301, IEEPA: the thicket of Trump tariffs

While USMCA navigates uncertainty, the Trump administration maintains or develops other tariff instruments affecting North American trade independently of the agreement. Section 232 tariffs on steel, aluminum, and copper apply to Mexican goods even when USMCA is in force. Section 122 tariffs — a 10–15% global surcharge — are expiring at the end of July 2026. Additional Section 301 investigations on pharmaceuticals, digital goods, and agriculture are expected.

This thicket of overlapping tariffs creates regulatory complexity that weighs on trade flows regardless of USMCA's fate. North American businesses that built their models on the predictability of the agreement must now maintain teams of customs compliance experts to navigate an environment where the rules change at an unpredictable pace. This administrative and compliance cost is real and significant, even if it does not appear in unemployment statistics or newspaper headlines.

The impact on cross-border investment

The real measure of the impact of USMCA uncertainty will be seen in foreign direct investment and job creation data over the next 12 to 24 months. Companies that had planned to shift production capacity to Mexico or Canada to serve the North American market will wait for the outcome of negotiations before committing billions. Canadian companies exporting to the United States will hesitate to invest in expanding their capacity in a context of uncertainty about future tariffs. This investment caution, invisible today, will translate into jobs not created tomorrow.

The final verdict on Trump's trade policy toward Canada and Mexico will not be rendered on July 1, 2026, or even in 2026. It will be rendered in the economic data of the next five to ten years, when the cumulative effects of regulatory uncertainty, tariff overruns, and deferred or canceled investment decisions become clearly visible. By then, Trump will likely have left active politics. His successors — and ordinary citizens — will inherit the consequences.

I am struck by the dissonance between Trump's rhetoric about protecting American workers and the concrete economic effects of his trade policy on those same workers. Midwest farmers are losing markets. Auto workers face higher supply costs. Small exporting companies are navigating an expensive regulatory labyrinth. Meanwhile, Trump celebrates his negotiation "victories." Trade policy is not an end in itself — it is a tool for improving economic well-being. When the tool becomes the goal, workers pay the bill.

Claudia Sheinbaum facing Trump: a relationship under tension

Mexican President Claudia Sheinbaum, who took office in October 2024, inherited a structurally complicated relationship with the United States. Donald Trump imposed 25% tariffs on many Mexican imports from the start of his second term, citing fentanyl trafficking and irregular migration as pressure points. These tariffs, formally incompatible with USMCA, have created a permanent legal and diplomatic tension between the two countries. The planned 2026 trade agreement renegotiation thus arrives in a context of particularly strained bilateral relations.

Mexico is nonetheless the United States' top trading partner by trade volume, overtaking China since 2023. Mexican exports to the United States exceed $400 billion per year, with a large share in automotive, electronics, and agri-food. For the Mexican economy, preferential access to the American market is not a marginal advantage — it is a structural pillar. A deterioration of USMCA would have immediate and severe economic consequences for millions of Mexican workers.

Continental supply chains and their fragility

One of the least visible but most important achievements of USMCA — and NAFTA before it — is the creation of integrated supply chains at a continental scale. An "American" car actually contains components manufactured in Canada, Mexico, and the United States, sometimes crossing the border several times during the manufacturing process. These integrations take decades to build and months to disintegrate. But they disintegrate quickly when regulatory uncertainty persists — companies begin exploring alternative sourcing as soon as the stability of preferential access is questioned.

The automotive industry is particularly exposed. USMCA rules of origin — requiring that a certain percentage of vehicle content come from North America to benefit from tariff-free access — were one of the most fiercely negotiated points in 2018. Revisiting these rules in the 2026 renegotiation could force many automakers to fundamentally rethink their continental sourcing strategy, with massive costs and transition timelines measured in years.

USMCA is not an ordinary trade agreement. It is the economic architecture of 500 million people on a continent. When Trump treats it as a negotiating lever, he is handling something too fragile and too interconnected to withstand improvised diplomatic accidents. Supply chains do not forgive off-the-cuff crises.

The "Trump-style" renegotiation scenario

The most likely scenario according to most analysts is a partial renegotiation of USMCA, formally presented as an "update" rather than a new treaty — which prevents Trump from needing Congressional approval for a new treaty, a lengthy and uncertain process. This renegotiation would target the same issues Trump foregrounded in 2018: steel and aluminum tariffs, automotive rules of origin, intellectual property protections in the pharmaceutical sector, and potentially new clauses on imports from China via Mexico — the problem known as "Mexico as a Chinese gateway."

Carney's Canada and Sheinbaum's Mexico both have an interest in a renegotiation that preserves the core of current preferential access. They will likely accept symbolic concessions on issues that allow Trump to claim a "victory" — such as slightly tightened rules of origin on certain products — in exchange for overall agreement stabilization. This is the logic of the Trump deal: every agreement is presented as a personal success, regardless of the actual substance.

Expiry without renegotiation: the catastrophic scenario

If no agreement in principle is reached before July 1, 2026, USMCA technically enters a period of legal uncertainty. The agreement's withdrawal provisions require six months' notice and a formal procedure. But the mere threat of expiry is sufficient to create uncertainty that affects corporate investment decisions. Several multinationals have already indicated to analysts that they would suspend new investments on the North American continent until the agreement's future is clarified.

For American farmers, USMCA's expiry would be catastrophic in the short term. Canada and Mexico together represent nearly 40% of US agricultural exports. Losing preferential access to these markets for American soybeans, corn, pork, and beef would have immediate effects on prices and farm incomes in states like Iowa, Illinois, and Kansas. These states voted heavily for Trump in 2024. They would be among the first to suffer the consequences of the agreement expiry that their president is threatening to allow.

Trump built his first term on negotiating USMCA. Letting it expire during his second term would be a politically embarrassing contradiction — undoing his own commercial legacy. He will negotiate. The question is what price the other signatories will have to pay to purchase the staging of his victory.

The likely outcome: annual reviews, not collapse

The consensus among trade analysts — from CSIS to the Cato Institute, from KCUR to Venn Strategies — is that USMCA will survive 2026 without immediate collapse. The economies are too integrated, the pressure from Congress and business associations is too strong, and even Trump implicitly acknowledges the agreement's value by continuing to negotiate rather than triggering the six-month withdrawal notice. What will happen is a decade of uncertain annual reviews, during which the rules of the game are constantly contested.

This is the commercial version of the world the Trump administration is taking us into: no spectacular collapse, but a slow erosion of the certainties that allowed long-term economic planning. Long-term investments are made under stable rules. When the rules are constantly in question, investment shrinks. That is a cost that neither immediate macroeconomic statistics nor presidential speeches capture well — but it is real.

What America must choose: partnership or domination

The fundamental question that Trump's USMCA policy poses to America is this: does it want trading partners or trading subjects? Partners negotiate, make compromises, jointly build an architecture that benefits everyone. Subjects obey the stronger party's conditions until accumulated resentment creates the conditions for a rupture or a diversification toward other partners.

Canada and Mexico are not standing still. Carney is building economic relationships with Europe and the Asia-Pacific. Mexico is attracting nearshoring investment from Asia as part of a strategy that reduces its long-term dependence on the American market. If Trump's America persists in its coercive posture, its two neighbors will progressively find new trade routes — and the patiently built North American architecture of 30 years will weaken. Perhaps not this year. Perhaps not in five years. But the movement will have been set in motion, and it will be hard to reverse.

I end this commentary with a simple conviction: international trade is not a zero-sum game. When the United States exports soybeans to Canada and imports Mexican auto parts, both sides gain — that is the essence of mutually beneficial trade. Treating your partners as adversaries to be beaten rather than as economic allies destroys the value that trade creates. That is exactly what the Trump approach to USMCA risks doing. And the first to suffer will be the Midwest farmers who voted for him.

By Maxime Marquette, columnist

Editorial stance

I am not a journalist but a columnist and analyst. My expertise lies in observing and analysing the geopolitical, economic and strategic dynamics that shape our world. My work is to take political strategies apart, to understand global economic movements, to put the decisions of international actors in context and to offer analytical perspectives on the changes that are redefining our societies.

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