U.S., Mexico, and Canada are headed for talks on the USMCA trade pact. Here's what's at stake

"Every day more than $4 billion worth of goods cross the United States' borders with Canada and Mexico-U.S. auto parts headed for car factories in northern Mexico, cartons of Mexican avocados bound for California supermarkets, Canadian aluminum destined to become cans of Campbell Soup. Much of this bustling cross-border commerce is duty-free, thanks to the US-Mexico-Canada Agreement, or USMCA, that President Donald Trump negotiated with America's northern and southern neighbors during his first term."

"The top U.S. trade negotiator told Politico in December that Trump would be willing to pull the United States out of the pact if he can't get the deal he wants. Trump also suggested last fall that the United States could negotiate separate deals with Canada and Mexico, ending the three-country North American bloc that previous administrations saw as crucial to competing economically with China and the European Union."

"At stake is $1.6 trillion worth of annual trade in goods between the United States and its two USMCA partners. Mexico and Canada are far ahead of China in both exports to and imports from the United States. American farmers are especially keen to see the deal renewed."

Over $4 billion in goods cross U.S. borders with Canada and Mexico daily under the USMCA trade agreement, which eliminated tariffs on cross-border commerce since July 2020. The pact now faces renewal negotiations in 2025, with the Trump administration demanding modifications and threatening to withdraw or pursue separate bilateral deals. The three countries have until 2036 to reach a renewal agreement under the treaty's renewal process, though any nation can exit with six months' notice. Mexico and Canada, heavily dependent on U.S. trade, fear potential withdrawal. At stake is $1.6 trillion in annual trade, with Mexico and Canada being larger U.S. trading partners than China.

Read at Fast Company