Jun. 5 at 6:06 PM
NAFTA 2.0/CUSMA agreement signed by President Trump during his 1st term, nearing deadline of July 1, to extend the pact for another 16 years. If all 3 countries don’t agree to renew it, the deal remains in place until at least 2036 — barring one of them quitting it entirely — & enters rolling annual reviews - however, by declining to formally renew, the Trump admin will trigger negotiations & an indefinite period of uncertainty about the future of the agreement
Against the backdrop of the review, the US has started separate bilateral talks w/ Canada & Mexico - Side deals may be struck to address them without changes to the CUSMA’s underlying text
U.S & Mexico have already scheduled their 3rd round of talks for mid-July, while the US has had less formal discussions w/ Canada
Almost
$2T in annual trade w/ each other & NAFTA-compliant goods have largely been exempt from President Trump’s tariff tantrum, including in the new duties revealed this week
Canada & Mexico are 2 of the largest US trading partners & the top buyers of its goods. But they’ve still been faced w/ new tariffs on products such as autos & steel — straining ties & spurring boycotts
Note: Any changes to th legal text would require a Congressional vote
Canadian officials are bracing for a scenario in which tariff negotiations drag on for years, perhaps all the way through the end of President Trump’s term in 2029
$SPY $TLT $EWC $EWW $XIU.TSX
