Trump tells Carney CUSMA is ’good deal for everybody’ but leaves door open for termination
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Financial Post | 6 May 2025
Trump tells Carney CUSMA is ’good deal for everybody’ but leaves door open for termination
By Jordan Gowling
Prime Minister Mark Carney and U.S. President Donald Trump both used their first meeting in Washington, D.C., Tuesday to signal that the current North American trade agreement was likely to form the basis of a renegotiated economic deal between the two countries, though Trump also raised the possibility that it could be scrapped entirely.
“The USMCA is great for all countries, it’s good for all countries,” Trump said during a question period involving both leaders and reporters in the Oval Office, a rare instance of recent praise for the Canada-U.S.-Mexico Agreement (also known as USMCA or CUSMA). “We do have a negotiation coming up in the next year or so, to adjust it or terminate it,” he added.
Carney, meanwhile said the discussions with Trump on Tuesday 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.
“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.
Carney was at the White House for his first meeting with Trump since winning the federal election last week. While Trump reiterated his desire to see Canada become the 51st state, introducing some tension into the midday joint press conference, Carney sounded a cautiously optimistic note when speaking to reporters later in the afternoon, repeatedly characterizing the discussions as constructive and indicating U.S. officials were specific about their concerns.
“These are the discussions you have when you’re looking to find solutions, as opposed to laying down terms … so I feel better about that,” he said.
Whether CUSMA will form the foundation of a new economic arrangement between Canada and the U.S. has been an open question in recent months.
The deal 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.
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.
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.
“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.”
Trump added that the U.S. doesn’t want Canadian steel “because we want to do it ourselves,” referring to his push to revitalize 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 (USTR).
When asked if there was anything Carney could say at Tuesday’s meeting that would prompt Trump to lift the tariffs on Canada, Trump replied, “No.”
When asked why not, he said, “It’s just the way it is.”
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.
Carney told reporters in the Oval Office that Canada remains the number one client for U.S. goods and that the content in Canadian cars is 50 per cent American.
“That’s not like anywhere else in the world,” he said.
Carney said that he made the argument to Trump that Canadian steel, aluminum and autoparts play an important role in “enhancing the competitiveness of American auto companies” and that he would continue to make that argument in subsequent meetings with the administration.
Brian Clow, former deputy chief of staff in PMO under Justin Trudeau, said Trump’s comments on Tuesday marked the first time the president has spoken positively about CUSMA since regaining the presidency.
“He said there needs to be some changes, but as far as I can tell and remember — and I watched this stuff pretty closely — he (Trump) said positive stuff about CUSMA when he was running for re-election, but then, as soon as the campaign was over and he had won, you never heard him say anything good about it,” Clow said. “Today was the first time he kind of did, which is maybe a good sign.”
Goldy Hyder, chief executive at the Business Council of Canada, said Trump’s recent carve-outs on CUSMA compliant goods were a sign the president wants to keep the deal and he construed Trump’s comments on Tuesday as a validation of CUSMA.
“I continue to believe, even though from time to time (Trump) does suggest other things, that the USTR … are working towards how we all get to the review and extension of the president’s own agreement,” Hyder said from Washington.
Matthew Holmes, executive vice president and chief of policy at the Canadian Chamber of Commerce, said the talks were a positive step toward resetting the relationship between the two countries.
“To me, the people in the room, the gravity of it, signalled that this is taken seriously by both sides,” Holmes said. “That there are major players involved by both sides, all rhetoric and headlines aside, the people in the room are the people who need to be in that room.”
Hyder said it’s an important reminder that trade agreements are iterative.
“It’s normal that these deals evolve, it’s happening a little sooner than we would have liked, but let’s get going,” he said. “Because the thing I’ve heard over the last 48 hours from chief executives that have been here … is the continued uncertainty is extremely harmful to our economy, to our people and to our relationships.”
