Trump: Don't Know If USMCA Is Still Necessary
President Donald Trump, ahead of a meeting with Canadian Prime Minister Mark Carney, denied that his tariff actions against Canada and Mexico have killed USMCA, but also cast doubt on its future. He said USMCA "was a transitional deal" to move away from NAFTA, and said "we'll see what happens" with the renegotiation. He said it could be adjusted, or terminated.
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"I don’t know if it’s even necessary anymore," he said in the Oval Office May 6.
Trump also repeated his argument that the U.S. doesn't need Canadian cars, energy, steel or aluminum "because we want to be able to do it ourself." (The U.S. is heavily reliant on Canadian aluminum, and cannot produce enough primary aluminum now to meet the demand.)
"We want to make our own cars -- we don’t really want cars from Canada." He added that, with the 25% tariff on imported cars, "at a certain point it won’t make economic sense for Canada to build those cars."
Although Canada is the top U.S. export destination, and accounted for close to $350 billion in goods exports last year, Trump said, "We don’t do much business with Canada. From our standpoint, they do more business with us."
Trump also repeated, as he said Sunday, that reporters are misunderstanding what's happening when they ask when he will sign deals where other countries lower their barriers to trade, and in exchange, the U.S. will drop reciprocal tariffs.
"In some cases, we want you to open up your country. In some cases, we want you to drop your tariffs," he said, but he also said the trading partners still will have "to pay for the privilege" of access to the U.S. market.
At another point, as he dismissed the possibility of give-and-take negotiations, he said: "We don’t want a piece of their market, we don’t care about their market."
He said he would set the number for countries, but he implied they may not be the same as what was announced on Liberation Day. "Maybe we were a little bit wrong, and we’ll adjust it," he said. "It’ll be a low number -- we’re not looking to hurt countries."
Regarding Canada, Trump said, in response to a reporter's question, that he still would like to absorb it into the United States, but acknowledged this is not something that will happen anytime soon. "I still believe that, but it takes two to tango, right?"
Carney said, "As you know, in real estate, there are some places that are never for sale," and Canada is one of those places. "It's not for sale, won't be for sale, ever."
A reporter asked Trump if there was anything Carney could say in their meeting that could get him to lift tariffs on Canada.
"No," he said. "It’s the way it is."
At a press conference with Canadian reporters after the meeting, Carney said he felt more positively about the relationship after their discussions, but that there was more work to do to convince Trump that 25% tariffs on Canadian cars, steel and aluminum harm U.S. competitiveness.
Carney said with regard to the 10% and 25% tariffs on Canadian goods outside those sectors that do not meet USMCA rules of origin, he communicated "the considerable efforts that have been made at our border, and behind the border in terms of raids," to stop fentanyl smuggling. "Canada's contribution to this problem was always very small, but it's down by over 90% with the efforts," he said, and so he thought he and his team made a very strong case for those border emergency tariffs to be removed.
"We had discussion about all the major issues ... including autos, and specifically, the strategic position of the Canadian-U.S. auto industry vs. foreign competition, including from Asia, and how that could be advanced," he said, and the two sides agreed to have more conversations in coming weeks. He said progress was made, and they have specific things to follow up on.
He said what he found most encouraging was "the breadth of discussion and how concrete the discussions were. These are the discussions you have when you're looking to find solutions, as opposed to laying down terms."
One reporter asked how Canada could trust that a renegotiated USMCA would be worth the paper it was written on. He replied, "The lesson of this experience would be to make sure the incentives are aligned, and durably so."