Washington, July 1: President Donald Trump‘s sweeping tariff policies have significantly reshaped trade across North America, with a senior US administration official saying the measures have already overtaken key aspects of the United States–Mexico–Canada Agreement (USMCA), even as negotiations on the pact continue.
The comments came after the United States chose not to renew the USMCA in its current form during its first mandatory six-year review, while allowing the agreement to remain in force as discussions with Mexico and Canada move forward.
According to the official, the administration’s trade strategy has had a greater impact on commercial ties among the three countries than the review process itself. The official said the US trade deficit with Canada has fallen by around 25 per cent over the past 18 months, while changes in trade with Mexico reflect the broader impact of global tariffs and the return of some supply chains to North America.
The administration maintains that President Trump’s tariff measures have become the primary force shaping regional trade policy, with many bilateral trade issues now being addressed outside the framework of the USMCA.
Officials said the broader objective remains reducing the US trade deficit while encouraging more domestic manufacturing. Citing recent trade data, the administration said the US goods trade deficit has declined by about 26 per cent over the past year, while monthly exports have exceeded US$300 billion.
The administration also downplayed concerns that the review process could create prolonged uncertainty for businesses, pointing to the strength of the US economy as a key driver of investment.
Negotiations with Mexico and Canada are expected to continue, with the administration aiming to reach an agreement before the review period expires.
The USMCA replaced the **North American Free Trade Agreement> (NAFTA) in July 2020 and requires the three member countries to conduct a joint review every six years to determine whether the agreement should be extended. If no unanimous decision is reached, the agreement remains in force while negotiations continue.