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Photo = Yonhap news |
[Alpha Biz= Reporter Kim Sangjin] Donald Trump, the former U.S. President-elect, has proposed imposing a 25% tariff on products from Mexico and Canada, reversing aspects of the U.S.-Mexico-Canada Agreement (USMCA). According to major news outlets, his proposal, announced on the 25th (local time), could violate the terms of the USMCA, a trade agreement he initiated during his first term.
The USMCA, which replaced the North American Free Trade Agreement (NAFTA), was signed in November 2018 and came into effect in January 2020. Trump had criticized NAFTA for disadvantaging the U.S., prompting the renegotiation that led to the USMCA. Under the USMCA, trade between the U.S., Mexico, and Canada is free of tariffs on most goods.
John Veroneau, who participated in trade negotiations during the George W. Bush administration, pointed out that imposing such tariffs could violate the USMCA. He stated, "Imposing a 25% tariff on all trade would undermine the agreement," and added that it could prompt retaliatory tariffs from other countries, damaging U.S. exporters.
The Wall Street Journal also noted that Trump’s proposal could effectively dismantle the USMCA, signaling a significant shift in trade policy. This aligns with Trump’s stance during his election campaign, where he blamed NAFTA for exacerbating the U.S. trade deficit. As president, he replaced NAFTA with the USMCA.
Under the terms of the USMCA, the agreement will be reviewed every six years, with the first review scheduled for 2026. In October, Trump had also indicated that he would trigger the agreement’s renegotiation clause during his presidency if elected, further challenging the deal’s provisions.
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
