Lutnick calls USMCA a bad deal, urges major North American rewrite

Howard Lutnick said the United States should not simply roll over the North American trade pact that has governed cross-border commerce since 2020, calling the U.S.-Mexico-Canada Agreement a “bad trade deal” that needs to be “reconsidered and reimagined.” Speaking Friday at a Semafor World Economy event in Washington, the Commerce secretary argued that treating Canada and Mexico like U.S. states without the same commitments was not workable, sharpening a debate that could reshape everything from auto supply chains to farm exports and energy flows.

The remarks landed as the first formal USMCA joint review approaches on July 1, 2026, six years after the agreement entered into force. Under Article 34.7, the three countries are expected to meet on the anniversary of the pact’s entry into force and can recommend changes while deciding whether to extend the agreement for another 16 years. That makes the coming review a practical test of whether North America keeps the rules businesses have spent years building around, or opens a period of uncertainty that could alter investment decisions across the continent.

Lutnick has already signaled he wants more than a routine renewal. Earlier this year, he said the U.S. wants to eliminate the “status quo” and pursue “fair trade” with Canada, a stance that suggests the Trump administration may use the review to press for changes rather than preserve the current framework. He also previously called the idea that free trade with Canada is dead “silly,” while acknowledging that a substantial amount of Canadian goods still enter the U.S. tariff-free under the present deal.

The stakes are especially high for Canada, which is trying to protect exports in autos, steel, aluminum and copper while preserving tariff-free access for much of its trade with the United States. A rewrite would not just affect diplomats and trade lawyers. It would reach assembly lines, grain shipments and energy corridors that depend on predictable rules and long lead times. Any move to reopen the pact would ripple through highly integrated industries that rely on components, raw materials and finished goods crossing the border multiple times.

Canadian officials were not immediately available to respond to Lutnick’s April 17 remarks. Canada’s trade minister, Dominic LeBlanc, met with Lutnick for 90 minutes in Washington on Aug. 26, 2025, a session Canadian officials later described as “constructive” and “lengthy.” With the Trump administration already leaning on tariffs and threats of deeper changes, the 2026 review is shaping up as a defining moment for North American trade relations, and for the companies that have built their business models on stability.