Can Trump violate USMCA? These are the tariff limits that prevent Trump from imposing his conditions, for the moment
The United States-Mexico-Canada Agreement entered into force on July 1, 2020 - but can Trump break it?
Just five years ago under Trump’s first term as President, the United States, Canada and Mexico all signed an historic agreement of friendship, trade and co-existence.
Known as the USMCA, it was a truly groundbreaking moment in the history of the three countries that make up the continent of North America: more than 510 million people and an economy of $30.997 trillion in nominal GDP were working in a truly harmonious flow.
However, since day 1 of returning to the White House, Trump has made it his public mission to cry out about imposing tariffs on various countries across the world in order to focus efforts on home-built goods - including Canada and Mexico, potentially violating the USMCA agreement that he himself signed just five years ago. In the words of the White House official website, he was “safeguarding the nation”.
What is the USMCA?
The USMCA was a similar agreement to the North American Free Trade Agreement (NAFTA), which had been in place since 1994. The deal allowed the free movement of goods between the three countries, facilitating easy trade and a friendly border on both sides of the US, empowering what is the largest trade bloc in the world.
What was a seemingly calm sea across the North American continent has seen a switch abruptly flicked, with an all-out trade war erupting after Trump’s decision to impose 25% tariffs: Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum quickly moved to announce retaliatory action on goods coming from the US.
Does Trump’s tariffs violate the USMCA?
As put by TimesNow, the USMCA terms “were not up for negotiations until July 2026″, meaning that Trump’s tariffs do violate the United States-Mexico-Canada Agreement and “put the entire deal in peril.”
That’s probably why Trump has since pulled back on his decision to impose immediate tariffs on the two countries, with the President recently announcing that he would temporarily delay tariffs on many goods from Mexico, rowing back to shore and saying that they would actually be shelved until April.
It was an abrupt decision made after a phone call on Thursday with Claudia Sheinbaum. On his social media site, Trump revealed that “Mexico will not be required to pay Tariffs on anything” that fall under USMCA.
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“This Agreement is until April 2nd,” Trump added. “I did this as an accommodation, and out of respect for, President Sheinbaum. Our relationship has been a very good one, and we are working hard, together, on the Border, both in terms of stopping Illegal Aliens from entering the United States and, likewise, stopping Fentanyl.”
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