Trump Calls CUSMA A 'Good Deal,' But Threatens Termination

Henrik Larsen

5 min read

Post on May 08, 2025

4.1

Share

Trump's Praise for CUSMA

Trump, despite his threats, frequently lauded CUSMA as a significant achievement. His praise stemmed from both perceived economic benefits and strategic political gains.

Economic Benefits Cited by Trump

Trump often highlighted specific economic advantages he believed CUSMA delivered. These included:

• Increased Manufacturing Jobs: He repeatedly claimed CUSMA would bring back manufacturing jobs to the United States, shifting production from overseas to North America. While concrete figures to support this claim were scarce, the administration pointed to increased investment in certain sectors as evidence.
• Reduced Trade Deficits: Trump emphasized that CUSMA would help reduce the US trade deficit with both Canada and Mexico. He frequently cited the need for “fair” trade and suggested that CUSMA addressed previous imbalances. However, critics argue that the actual impact on trade deficits has been minimal and the overall trade balance remains complex.
• Agricultural Exports: The administration highlighted improved access to the Canadian and Mexican markets for US agricultural products as a key benefit. This included provisions for specific dairy products, which were a significant point of contention during negotiations. However, the impact of CUSMA on the agricultural sector remains a subject of ongoing debate.

It's crucial to note that assessing the true economic impact of CUSMA requires comprehensive, long-term analysis, going beyond the often-politicized claims made during its negotiation and ratification. Independent studies have produced mixed results, with some supporting Trump’s claims to a certain extent and others pointing to more nuanced effects.

Political Advantages Highlighted by Trump

Beyond economics, Trump viewed CUSMA as a demonstration of American negotiating power. He framed the agreement as a victory over his predecessors, who he claimed had negotiated unfavorable trade deals. His political advantages included:

• Strengthened Bilateral Relationships: Trump presented CUSMA as a way to strengthen ties with key North American allies, albeit often tense ones. He portrayed the agreement as a win-win situation that benefitted all three countries, emphasizing a revised approach to trade relations compared to the previous NAFTA agreement.
• Demonstrated Negotiating Strength: The renegotiation of NAFTA into CUSMA allowed Trump to showcase his negotiating prowess on the international stage. This played well to his political base, which valued a strong and assertive approach to trade negotiations.

However, critics argued that Trump's emphasis on political gains overshadowed a thorough assessment of the agreement's long-term economic consequences. The focus on renegotiation, while symbolically significant, arguably diverted attention from addressing other underlying trade challenges.

Trump's Threats of CUSMA Termination

Despite his praise, Trump repeatedly threatened to withdraw the US from CUSMA. These threats served as a tool for political leverage and negotiating tactics.

Reasons Behind the Threats

Trump’s threats to terminate CUSMA were often linked to:

• Disagreements Over Specific Provisions: He expressed dissatisfaction with particular aspects of the agreement, often using these disagreements as leverage in negotiations.
• Perceived Unfair Trade Practices: Accusations of unfair trade practices by Canada and Mexico fueled his threats, reinforcing his “America First” agenda.
• Political Leverage: The threat of termination was a negotiating tactic employed by Trump to extract concessions from Canada and Mexico on other trade issues. This high-stakes approach aimed to secure the best possible deal for the US, even if it meant risking the entire agreement.

Trump’s statements on these issues are well-documented in official transcripts and press releases, providing primary source material to understand his perspective.

Potential Consequences of Termination

The potential consequences of a CUSMA termination were severe:

• Economic Disruption: Withdrawal would cause significant economic disruption across North America, impacting industries reliant on cross-border trade such as the automotive and agricultural sectors. Supply chains would be severely affected.
• Increased Trade Barriers: Termination could lead to the re-imposition of tariffs and other trade barriers, increasing costs for businesses and consumers.
• Strained International Relations: Such a move would severely strain relationships between the US, Canada, and Mexico, potentially affecting future cooperation on other issues.

These potential repercussions highlighted the high stakes involved in Trump's wavering stance on the agreement.

CUSMA's Current Status and Future Outlook

Post-Trump Developments

The Biden administration, while initially reviewing the agreement, has largely maintained CUSMA. This continuity signals a commitment to stability in North American trade. However, the Biden administration has focused on incorporating a stronger emphasis on labor and environmental standards.

Long-Term Implications for North American Trade

CUSMA's long-term impact remains to be seen. Its continued existence represents a commitment to trilateral trade, but challenges remain. The agreement's effectiveness in addressing long-term trade imbalances and ensuring fair competition will require ongoing monitoring and potential adjustments. Future trade negotiations between the three countries will likely focus on addressing emerging issues such as digital trade and supply chain resilience.

Conclusion

Former President Trump's view of CUSMA was characterized by a simultaneous declaration of it being a "good deal" and the threat of its termination. This contradictory stance highlights the complexities and uncertainties inherent in international trade agreements. While Trump's actions didn't ultimately lead to termination, the threat underscored the fragility of such deals and the importance of ongoing negotiation and adaptation. The future of CUSMA and North American trade relies on continued dialogue and a commitment to addressing the evolving challenges of the global marketplace.

Call to Action: Understanding the intricacies of CUSMA, its potential benefits and risks, is crucial for anyone involved in North American trade. Stay informed on the latest developments regarding the CUSMA agreement and its impact on your business or industry. Learn more about CUSMA and its future today!