Trump plans to renegotiate the trade agreement he previously established with Mexico and Canada.
This time around, instead of scrapping the North American Free Trade Agreement, frequently dubbed as the "worst trade deal ever made," he intends to breathe new life into his own trade pact.
Back in 2018, Trump endorsed the United States-Mexico-Canada Agreement, or USMCA, marking its official commencement in January 2020, thus ousting NAFTA.
In the same year, Trump proclaimed that USMCA would be "the most cutting-edge, contemporary, and well-balanced trade agreement in the history of our nation, featuring the most advanced worker protections ever devised."
However, he now believes changes are required.
"Upon assuming office, I will officially indicate to Mexico and Canada my intent to invoke the six-year renegotiation provision within the USMCA that I spearheaded," Trump stated during a speech at the Detroit Economic Club last week.
The USMCA stipulates a review by the three signatory nations five years into effect.
When quizzed by Fox News’ Maria Bartiromo in an interview broadcasted on Sunday regarding his intention to renegotiate the USMCA, Trump affirmed it wouldn't tamper with the deal he had established.
"I aim to enhance it considerably. I aim to maximize the benefits for the automobile sector now," he said.
Harris also contemplates reassessing the USMCA
Vice President Kamala Harris has similarly expressed her desire to review the USMCA process.
In her role as a US senator at the time, Harris was part of the 10-member opposition to USMCA.
"I recognized that it did not suffice to safeguard our nation and its workers," she stated last week.
Post the 2020 Senate vote, Harris had expressed concerns regarding the USMCA's environmental provisions, indicating they were inadequate in addressing climate change.
The USMCA's Components
A significant portion of USMCA merely upgraded the 25-year-old NAFTA.
One of the most substantial modifications involved a new incentive for domestic car and truck production. USMCA necessitated that 75% of a vehicle's components be manufactured in one of the three nations – a marked improvement from the previous 62.5% mandate – to maintain its exemption from import taxes when transported across borders.
It also required a higher portion of vehicle components to be produced by workers earning a minimum of $16 per hour.
The trade agreement opened up extensive advantages for the technology sector, with a digital trade chapter incorporating advanced protections that were absent from the original NAFTA.
Strict labor regulations and environmental safeguards were also included.
In light of his belief that changes are needed, President Trump mentioned his intention to invoke the six-year renegotiation provision within the USMCA, aiming to enhance the benefits for the automobile sector.
Vice President Harris has echoed this sentiment, stating during her time as a US senator that she recognized the initial USMCA did not sufficiently protect the nation and its workers, expressing concerns about its environmental provisions.
