WASHINGTON / OTTAWA — U.S. Commerce Secretary Howard Lutnick said Friday that the Trump administration is preparing to revisit the United States–Mexico–Canada Agreement (USMCA), warning that the current trade deal “needs to be reconsidered and reimagined” as it approaches its formal review in the coming months.
Speaking at a Semafor-hosted conference, Lutnick delivered a blunt assessment of the pact that governs more than $1.5 trillion in annual North American trade, signaling that President Donald Trump views the agreement as structurally imbalanced despite preserving duty-free access for most goods across the region.
“Making Mexico and Canada be treated like Georgia and Alabama without them being committed…it’s a bad trade deal,” Lutnick said. “There’s plenty of good in it, but there’s a huge amount of bad in it, and it needs to be reconsidered for the benefit of America.”
The USMCA, which replaced NAFTA in 2020, includes a built-in six-year review mechanism designed to assess performance and determine whether the agreement should be extended or revised. That review is now drawing heightened attention from policymakers and business leaders alike, as early signals from Washington point to potential changes that could ripple across integrated supply chains in manufacturing, agriculture and energy.
The remarks have injected fresh uncertainty into corporate planning across North America, where companies have long relied on predictable trade rules to guide investment and hiring decisions. The agreement has been especially critical for Canada and Mexico, whose exports to the United States largely flow tariff-free under its provisions.
Canadian Prime Minister Mark Carney has emphasized the importance of stability in cross-border trade, framing the agreement as essential to economic growth and job creation. “Canada’s prosperity is built on strong and reliable trade relationships,” Carney said in recent remarks, adding that his government would “defend the interests of Canadian workers and businesses” as the review process unfolds.
Canada’s Minister of Export Promotion, International Trade and Economic Development, Mary Ng, struck a similar tone, signaling openness to discussions while underscoring Ottawa’s position that the agreement remains fundamentally sound. “USMCA is a modern, high-standard agreement that benefits all three countries,” Ng said. “We will approach the review constructively while firmly defending Canada’s interests.”
In Mexico, President Claudia Sheinbaum has also stressed the importance of maintaining North America’s economic integration, particularly at a time of intensifying global competition. “Trade integration in North America has been fundamental to our shared prosperity,” Sheinbaum said, noting that Mexico would work with its partners to strengthen the agreement while safeguarding national priorities.
Mexico’s Economy Secretary Marcelo Ebrard indicated that Mexico is preparing for negotiations but expects any revisions to remain balanced. “We are ready for the review process,” Ebrard said. “The agreement has delivered results, and any modernization should reinforce regional competitiveness—not weaken it.”
While the administration has yet to outline specific proposals, trade analysts expect the review to focus on tightening rules of origin, particularly in the automotive sector, strengthening enforcement of labor and environmental provisions, and updating digital trade rules to reflect evolving technologies. Officials are also expected to push for measures that encourage more production within the United States, a central theme of the administration’s broader economic agenda.
Lutnick’s comments reflect a deeper concern within the administration that the current framework provides broad market access without sufficient alignment on economic and regulatory commitments. That view is likely to shape the U.S. negotiating posture as talks begin.
Any move to significantly alter the agreement carries high stakes. The USMCA underpins decades of economic integration, with supply chains that often cross borders multiple times before goods reach consumers. For U.S. companies, changes could create new domestic opportunities but also introduce cost pressures and operational disruptions. For Canada and Mexico, whose economies are more dependent on U.S. trade, the risks are even more pronounced.
As the review approaches, the tone set by Lutnick suggests that negotiations may extend beyond routine updates, setting the stage for a consequential test of North America’s economic partnership and the future direction of regional trade.
—JBiz News Desk
