President Donald Trump has made his clearest remarks yet on the future of a new North American trade agreement.
The Canada-U.S.-Mexico deal is up for review this year, or the USMCA as it’s called in Washington. Trump is now calling it irrelevant, and doesn’t really care about re-negotiating the pact.
Trump’s latest comments came during a tour of a Ford auto manufacturing plant in Dearborn, Michigan. He was asked by reporters about the state of negotiations on a new trade deal.
"I don’t even think about USMCA. I want to see Canada and Mexico do well. But the problem is we don’t need their product," said Trump. "It expires very shortly, and we could have it or not, it wouldn’t matter to me. You know we don’t need cars made in Canada. We don’t need cars made in Mexico. We want to make them here."
Trump has said he views the USMCA agreement as transitional and it may have outlived its usefulness. The reference to Canada’s automobile sector hits directly at Ontario, the heart of the auto industry in Canada. `
"Our Canadian market is extremely important to Americans. By our calculation there are at least 135,000 Americans who are only in work because they make cars that get sent to Canada, and that Canadians buy" said David Paterson, Ontario’s representative in Washington. "So if we didn’t have trade going back and forth that would be a loss of a considerable number of jobs. Canada is an enormous market. We’re a wealthy country and we’re very very important to the American economy to jobs and to affordability."
Some analysts are also saying that Trump’s comments should be taken with a grain a salt. David Adams is the CEO of the Global Automakers of Canada and echoes the importance of the Canadian market to the U.S.
"What he does need to consider is that Canada is the largest market for American vehicles as well," said Adams. "And that’s something I suspect our negotiators will be raising with the president's administration that well you might not want our vehicles, but if that’s the way we’re going to play the game then there’s a case to be made that perhaps we don’t need your vehicles either."
But one thing is clear: if Canada does need a new trade agreement the current one offers many protections against the tariffs coming out of the White House. Trump’s rhetoric also came on the eve of Prime Minister Mark Carney’s four-day trip to Beijing, the first for a Canadian leader in almost a decade.
Carney wants to re-set trade relations with China, and end Chinese tariffs on Canadian canola, pork and seafood products. Beijing is also eager to recalibrate relations. And already a memorandum of understanding has been signed, which could ramp up the amount of oil, natural gas and clean energy that Canada exports to China.
Any new strategic partnership between Ottawa and Beijing, however, will be watched closely by Trump, and could lead to some fall out from Washington.
