Trump tells Carney CUSMA is ‘good deal for everybody’ but leaves door open for termination

Canadian Prime Minister Mark Carney and U.S. President Donald Trump meet in the Oval Office at the White House on May 6. Photo by Anna Moneymaker/Getty Images

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Prime Minister Mark Carney and U.S. President Donald Trump both used their first meeting in Washington, D.C., Tuesday to suggest the current North American trade agreement would be subject to renegotiation, with Trump also floating the possibility that it could be terminated.

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“The USMCA is great for all countries, it’s good for all countries,” Trump said in reference to the Canada-U.S.-Mexico Agreement (also known as USMCA or CUSMA) during a question period involving both leaders and reporters in the oval office. “We do have a negotiation coming up in the next year or so, to adjust it or terminate it.”

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Carney said the discussions he was having with the president later on Tuesday afternoon would be the starting point for a much larger negotiation on trade and security, adding that aspects of the CUSMA deal will have to change.

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“Some things about it are going to have to change,” he said. “Part of the way you (Trump) have conducted these tariffs, has taken advantage of existing aspects of USMCA.”

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CUSMA was negotiated by Trump during his first term and signed in 2018 to replace the North American Free Trade Agreement (NAFTA) from 1993. The trade pact has a mandatory review scheduled for July 1, 2026.

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In March, Trump imposed 25 per cent tariffs on Canadian goods, steel, aluminum and autos, in addition to a 10 per cent tariff on Canadian energy, in contravention of the trade agreement.

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During Tuesday’s press conference, Trump called CUSMA a “transitional deal” and took aim at the Canadian automotive industry and Canadian steel and aluminum. The U.S. administration imposed a 25 per cent tariff on all foreign-made autos on April 3, but has shown some deference for the existing trade deal by more recently announcing carve-outs for Canadian and Mexican auto parts that are compliant with CUSMA.

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“We want to make our own cars, we don’t really want cars from Canada,” he said. “At a certain point, it won’t make economic sense for Canada to build those cars.”

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Trump added that the U.S. doesn’t want Canadian steel “because we want to do it ourselves,” referring to a ramp-up in U.S. domestic manufacturing. He also reiterated a familiar complaint about the Canada-U.S. trade balance, claiming the U.S. has a $200-billion trade deficit with Canada that amounts to a subsidy, a characterization economists have rejected. The U.S. goods trade deficit with Canada was US$63.3 billion in 2024, according to the United States Trade Representative.

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Trump’s trade actions have already had a material impact on Canadian jobs in the sectors he is targeting. On Tuesday, Unifor announced Stellantis N.V. was reducing its production at its Windsor assembly plant and last Friday, General Motors laid off 750 workers at its Oshawa plant.

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During the press conference, Carney stressed Canada remains the number one client for U.S. goods and that the content in Canadian cars is 50 per cent American.