[CTC] Trump Mulls a North American Trade Pact Without Canada

Thu Feb 19 10:13:49 PST 2026

*[Editorial Note: Don't let allies get manuevered by Trump into defending
the status quo!  Trump's classic negotiating strategy is threatening to
blow up a deal.  Doing so in this context gives him more negotiating
leverage with Canada and Mexico — and also with Congress.  Our job is
holding the president accountable for meeting his broken trade promises,
reiterated by his USTR herein: create jobs, raise wages, shrink the
deficit.  Trump's trade agenda to date has instead prioritized more
giveaways for Big Tech billionaires and other corporate special interests.
—Arthur]*

https://www.nytimes.com/2026/02/19/business/economy/trump-canada-mexico-usmca-trade.html

Trump Mulls a North American Trade Pact Without Canada

*U.S. officials are threatening major changes to a trade agreement with
Mexico and Canada that could upend the way business is done and leave
Canada on the outs.*

Earlier this month, President Trump found the latest pressure point to
extend his leverage over Canada: a new bridge connecting the country to the
United States that is expected to open this year.

Mr. Trump threatened
<https://www.nytimes.com/2026/02/09/us/politics/trump-gordie-howe-bridge-canada.html>
 to block the opening, just hours after the billionaire owner of a
competing U.S.-Canada bridge met with Howard Lutnick
<https://www.nytimes.com/2026/02/10/world/canada/bridge-owner-trump-lutnick.html>,
Mr. Trump’s commerce secretary. It wasn’t that the president was
particularly passionate about the new bridge. What excited him, officials
familiar with his thinking said, was the opportunity to use the bridge to
force Canada to make trade concessions.

“I will not allow this bridge to open until the United States is fully
compensated for everything we have given them, and also, importantly,
Canada treats the United States with the Fairness and Respect that we
deserve,” Mr. Trump said on social media on Feb. 9.

The threat was a preview of the high-pressure tactics the president is
expected to deploy when his administration renegotiates a trade deal with
Canada and Mexico. The United States-Mexico-Canada Agreement, which Mr.
Trump signed into law
<https://www.nytimes.com/2020/01/29/business/economy/usmca-trump.html> during
his first term, is set to be reviewed by the summer.

U.S. officials have been raising pressure on Canada to get it to concede to
their demands over trade and other issues. Mr. Trump’s threat to block the
Detroit-to-Windsor bridge was the latest in a series of flash points that
Mr. Trump has capitalized on to needle Prime Minister Mark Carney of
Canada. In October, Mr. Trump suspended trade talks over an advertisement
featuring a historical address by President Ronald Reagan decrying tariffs
<https://www.nytimes.com/2025/10/25/world/canada/trump-tariffs-reagan-ad.html>,
which was paid for by the Province of Ontario and aired in the United
States. Mr. Carney apologized.

The Trump administration has a list of things it wants Mr. Carney to
concede, including longstanding grievances about protected industries in
Canada, such as the dairy sector. Another pressing issue for the U.S.
administration is the fact that liquor distributors controlled by Ontario
and other provincial governments in Canada pulled U.S. liquor off their
shelves
<https://www.nytimes.com/2025/03/06/world/canada/canada-liquor-boycott-tariffs.html>last
year, in retaliation against Mr. Trump’s tariffs on Canada.

Trump administration officials have also been irked by Mr. Carney’s global
charm offensive as he seeks to bolster Canada’s trade relationships with
other countries, including China. Responding to a modest tariff deal that
Mr. Carney struck during a visit to Beijing last month
<https://www.nytimes.com/2026/01/17/world/canada/carney-china-trade-tariffs.html>,
Mr. Trump threatened to impose 100 percent tariffs on Canadian goods, and
claimed that China would “take over” Canada and even ban hockey.

He also responded bitterly to Mr. Carney’s speech in Davos
<https://www.nytimes.com/2026/01/20/world/canada/carney-speech-davos-trump.html>,
Switzerland, where he said that the era of a U.S.-led global order was over
and that middle powers like Canada should band together to defend their
interests.

“Canada lives because of the United States,” Mr. Trump said the day after
Mr. Carney’s Davos speech. “Remember that, Mark, the next time you make
your statements.”

The spats haven’t resulted in new tariffs, but they form the acrimonious
backdrop against which the two countries enter trade talks in earnest this
year. The text of the U.S.M.C.A. says the review must be completed by July
2026.

Mr. Trump and his advisers have indicated that the three-country pact could
be scrapped altogether. Instead, the United States could end up with
bilateral deals with Canada and Mexico, the advisers have suggested. The
White House did not respond to a request for comment.

That could be catastrophic for companies that have structured their
business around the trade agreement. Trillions of dollars of trade happens
under the pact, and leaving it could cause pain for American farmers and
automakers and dent U.S. economic growth. Some trade experts and executives
believe the idea of abandoning the North American trade deal is probably a
pressure tactic from a president who has walked back from some of his
biggest economic threats.

But Mr. Trump has been dismissive when asked about the future of the
agreement. “There’s no real advantage to it — it’s irrelevant,” he said in
January. “Canada wants it. They need it.”

The Trump administration has imposed tariffs on Canada and Mexico despite
the U.S.M.C.A. In Canada, those are hitting important pockets of the
economy hard: Lumber, autos, steel and aluminum are particularly hurting.

But the current arrangement does leave most of the U.S.-Canada trade
tariff-free, as it does with Mexico. The president created major exemptions
to his tariffs last year for goods that follow the rules of U.S.M.C.A. That
has led to a rush of companies trading under the pact’s terms, and
significantly brought down the average U.S. tariff rate.

Data released on Thursday showed trade between the United States and Canada
slowing in 2025. The trade deficit with Canada shrank to $46.4 billion in
2025 from $62 billion the prior year. But that was because both imports and
exports fell as the United States bought less from Canada and sold less to
its northern neighbor.

In an interview with The New York Times in January
<https://www.nytimes.com/2026/02/16/business/economy/jamieson-greer-trump-trade.html>,
Jamieson Greer, the U.S. trade representative, said that the administration
wanted to keep things in the agreement that were working, but that there
was no “natural reason” that U.S.M.C.A. needed to be one pact. The United
States would discuss energy production, corn sales and labor issues with
Mexico, while the main issues with Canada included dairy, electricity
transmission and digital regulation, he said.

“We’re not wedded to any particular agreement or format of an agreement
simply because it’s there,” Mr. Greer said. He said the administration’s
priority was to bring manufacturing jobs to the United States, encourage
wage growth and shrink the U.S. trade deficit
<https://www.nytimes.com/2026/01/29/business/us-trade-deficit-tariffs.html>.

“The president’s been quite clear,” Mr. Greer said in a second interview
this month. “He’s half inclined to leave. So we’ll see how that goes.”

Mr. Greer helped negotiate and pass U.S.M.C.A. through Congress during Mr.
Trump’s first term, as chief of staff to Robert E. Lighthizer, who was then
the trade representative. But he is not afraid of changing the agreement,
people close to him say.

Mr. Greer last summer began urging a more disruptive approach to U.S.M.C.A.
negotiations, saying its current form wasn’t working for the United States,
one person who spoke with him said. One outcome of that approach could
involve the president’s withdrawing from the agreement and replacing it
with two separate deals, the person said.

U.S. officials are unhappy with Canada’s continued protections for its
dairy industry, among other issues. To keep talks on track last year, Mr.
Carney dropped Canada’s planned digital services tax
<https://www.nytimes.com/2025/06/29/world/canada/trump-digital-services-tax.html>,
which the United States had criticized, but the concession did not seem to
advance talks.

The U.S. administration has also criticized Mexico for welcoming investment
from Chinese factories, which can then export their products to the United
States under the preferential terms of the trade deal.

The Canadian government is bracing for a rupture and weighing the financial
and political costs of changing domestic policies that protect socially and
economically sensitive industries, in exchange for a trade deal with the
United States.

Two Canadian officials involved in the U.S. trade discussions, who spoke
anonymously to frankly convey their impressions of the state of the talks,
said expectations in Ottawa for a full renewal of the U.S.M.C.A. were very
low. Mr. Carney’s team, they said, even questions whether it could trust
any fresh trade agreements with Mr. Trump.

The Canadian government, they said, is preparing for long, bumpy and
dramatic talks with a hostile U.S. administration, and even for a breakup
of the U.S.M.C.A. Mr. Trump repeatedly said last year that he wanted Canada
to become part of the United States — calling it the 51st state — and that
he was prepared to use “economic force” to get the country to heed his
wishes.

Mr. Carney was elected last spring
<https://www.nytimes.com/2025/04/28/world/canada/canada-election-mark-carney-win.html>
 on a pledge to stand up to Mr. Trump. He said at the time that the
president wanted to “break us so that America can own us.”

Despite some positive interactions between Mr. Trump and Mr. Carney,
Canadian officials said they believed that Mr. Trump wanted to weaken
Canada economically to force it to give up some protectionist policies it
preserved in previous trade talks.

By contrast, U.S. officials began meeting
<https://www.ustr.gov/about/policy-offices/press-office/press-releases/2026/january/readout-ambassador-greers-meeting-mexican-secretary-economy-marcelo-ebrard>
 with the Mexican government about the trade deal in January, and Mexicans
say they are optimistic.

The divide-and-conquer tactic is not new for the Trump administration. In
Mr. Trump’s first term, when U.S. officials were negotiating the
U.S.M.C.A., they also pushed ahead with negotiations with Mexico, while
threatening to jettison Canada.

It was Mr. Greer who had kicked off the strategy. He traveled to Mexico in
early 2018 to have conversations with the Mexicans without Canada’s
awareness, he said in the interview.

The United States went ahead and proposed a bilateral deal with Mexico and
told Canada to get on board or be left out. One minute before the deadline
to reach an agreement, Canada squeezed one concession out of Mr. Greer’s
team and made one concession of its own, and a deal was made.

Ana Swanson <https://www.nytimes.com/by/ana-swanson> covers trade and
international economics for The Times and is based in Washington. She has
been a journalist for more than a decade.

Matina Stevis-Gridneff <https://www.nytimes.com/by/matina-stevis-gridneff> is
the Canada bureau chief for The Times, leading coverage of the country.

Tyler Pager <https://www.nytimes.com/by/tyler-pager> is a White House
correspondent for The Times, covering President Trump and his
administration.
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