Trump Privately Weighs Exiting USMCA Trade Pact He Negotiated

WASHINGTON — In a stunning development that threatens to upend North American commerce, President Donald Trump is privately considering exiting the United States-Mexico-Canada Agreement (USMCA), the very trade pact he negotiated and signed into law to replace NAFTA, according to a bombshell report from Bloomberg News.

Citing people familiar with the matter, Bloomberg reported Wednesday that Trump has been musing about withdrawing from the trilateral trade deal, injecting fresh uncertainty into already tense renegotiations between the three allied nations. The revelation comes as tensions flare across multiple foreign policy fronts and markets brace for potential economic turbulence.

The USMCA, which took effect in July 2020, was hailed by Trump as "the best and most important trade deal ever made by the USA" — a dramatic upgrade from the North American Free Trade Agreement he routinely decried as "the worst trade deal ever made." The agreement governs more than $1.3 trillion in annual trade between the three nations.

White House Responds to Report

A White House official pushed back on the report Wednesday, telling Reuters that "any discussion about potential presidential action unless announced by the President himself is baseless speculation." The official emphasized that any formal announcement would come directly from Trump.

Still, the mere possibility of a USMCA withdrawal has sent shockwaves through business communities across all three countries. The agreement established modernized rules for digital trade, intellectual property protection, and labor standards while maintaining largely tariff-free commerce across the continent.

Trade experts warn that exiting USMCA without a replacement framework would create immediate chaos for supply chains that have been built over three decades. "We're talking about potential disruptions to everything from auto manufacturing to agricultural exports," said one trade attorney familiar with the agreement's complexities. "The ripple effects would be felt within days."

Context: Tariffs Already Roiling Markets

The reported musings about USMCA withdrawal come as Trump has already imposed significant tariffs on Canadian and Mexican imports. Just last month, the administration announced 25% tariffs on most goods from both neighboring countries, though USMCA-compliant products received a temporary exemption until April 2.

Wall Street has been closely monitoring trade developments, with major investment banks warning that prolonged uncertainty could dampen the IPO boom many had predicted for 2026. The stock market has shown volatility in recent sessions as traders weigh the economic implications of shifting trade policy.

Canada and Mexico have retaliated with their own counter-tariffs, threatening a full-blown trade war between traditional allies. Canadian Prime Minister Mark Carney — who recently dealt with domestic tragedy — has taken a firm stance against what Ottawa views as unjustified American trade actions.

The timing is particularly sensitive given ongoing regulatory rollbacks and the administration's broader "America First" economic agenda.

What Would Exit Mean?

Withdrawing from USMCA would not automatically return North America to NAFTA terms. Legal scholars note that without a formal replacement, trade between the three nations would largely revert to World Trade Organization most-favored-nation status — meaning significant tariffs would apply to goods that currently cross borders duty-free.

The automotive sector would be particularly hard hit. Modern vehicles contain parts that cross North American borders multiple times during assembly. New tariffs could add thousands of dollars to vehicle costs and potentially shutter manufacturing plants across all three countries.

Agricultural exports — a cornerstone of the U.S. trade relationship with both neighbors — would also face immediate disruption. American farmers, already squeezed by input costs, could see their export markets evaporate overnight.

Political Calculations

Trump's reported consideration of USMCA withdrawal represents a remarkable about-face from his first-term signature achievement. The agreement was central to his 2020 campaign messaging on economic nationalism and was touted as proof that his unconventional negotiating style could deliver results.

Political analysts suggest the president may be using the threat of withdrawal as leverage in ongoing negotiations over tariffs and border security. However, the strategy carries significant risks — including potential economic damage and strained diplomatic relations with America's closest allies.

Congressional reaction has been swift and largely negative. Lawmakers from agricultural states have expressed alarm at the potential economic fallout, while business groups have urged the administration to clarify its intentions.

As markets await further clarity, one thing is certain: the future of North American trade — and the $1.3 trillion in annual commerce it facilitates — has never been more uncertain.