President Trump Creates New Trade Deals With Canada And Mexico Seeking To Replace “NAFTA” With “USMCA” (United States-Mexico-Canada Agreement); Agreement Awaits Congressional Approval

 In Economy, Fake News, International Relations   Last Updated: November 11, 2018

President Trump has negotiated a potential new trade deal between the U.S. and both Canada and Mexico.  If approved by congress, the new trade deal called the United States-Mexico-Canada Agreement (USMCA) would replace the original deal known as the North American Free Trade Agreement (NAFTA).

On Friday August 31, 2018 Trump formally notified “Congress that he would enter into a trade agreement with Mexico. He stipulated in a letter that Canada could be added ‘if it is willing.’”

The United States runs an overall trade surplus with Canada, one of its biggest trading partners.  Trump wants Canada to end its steep tariffs on US dairy products, claiming they hurt US farmers. Canadian Prime Minister Justin Trudeau has pledged to protect his country’s dairy industry.  Trump on Friday also threatened new tariffs on Canadian cars if the country doesn’t comply with US-terms of a new trade deal.”

The new USMCA deal was announced on Monday October 1, 2018 after coming to an agreement with Canada the previous day and Mexico in August.

The most significant changes from NAFTA are as follows:

  • “Automobiles must have 75 percent of their components manufactured in Mexico, the US, or Canada to qualify for zero tariffs (up from 62.5 percent under NAFTA).”
  • “40 to 45 percent of automobile parts have to be made by workers who earn at least $16 an hour by 2023. Mexico has also agreed to pass laws giving workers the right to union representation, extend labor protections to migrant workers, and protect women from discrimination. The countries can also sanction one another for labor violations.”
  • Canada’s dairy market will now be more accessible to U.S. dairy farmers
  • “The terms of copyright [are extended] to 70 years beyond the life of the author (up from 50). It also extends the period that a pharmaceutical drug can be protected from generic competition.”
  • “New provisions to deal with the digital economy [include] prohibiting duties on things like music and e-books, and protections for internet companies so they’re not liable for content their users produce.”
  • Canada and Mexico did not get protection from section 232 tariffs (the trade loophole Trump used to impose steel and aluminum tariffs).

Congress still has to approve this new trade deal, which could take years.

Be wary of fake news on this- a Fox News opinion piece notes that Trump had already replaced NAFTA with a new deal with Mexico in August of 2018.



Damian Paletta , Jeff Stein and Heather Long. "Trump to advance trade deal with Mexico after NAFTA talks with Canada falter." Washington Post, 31 August 2018. Web. 02 September 2018.
Jackie Wattles and Katie Lobosco. "Trump again threatens to leave Canada out of new NAFTA deal." CNN, 01 September 2018. Web. 02 September 2018.
Christian Whiton. "Trump replaces NAFTA and triumphs -- New trade deal with Mexico is YUGE win for both countries." Fox News, 28 August 2018. Web. 02 September 2018.
Sonny Perdue. "USMCA a Trade Deal for the 21st Century.", 18 October 2018. Web. 11 November 2018.
Steve Holland and Dave Lawder. "Trump hails Canada, Mexico trade pact as win for U.S. workers." Reuters, 01 October 2018. Web. 11 November 2018.
Jen Kirby. "USMCA, Trump’s new NAFTA deal, explained in 500 words." Voc, 03 October 2018. Web. 11 November 2018.
Recommended Posts

Start typing and press Enter to search