The United States, Mexico and Canada are looking toward a possible renegotiation of the trade agreement that binds them, as business leaders on both sides of the U.S.-Mexico border hope their largely tariff-free trade relationship can stand.
Ken Salazar, a former U.S. ambassador to Mexico, told a crowd at Friday’s Arizona-Mexico Commission summit in metro Phoenix that the longstanding agreement now hangs in the balance.
“It’s going to be an intense time,” Salazar said. “There are risks we can talk about, but the reality is, the USMCA can be terminated at any time, basically with a 90 day notice by any party.”
President Donald Trump has said he wants to use the 2026 review period of the treaty his previous administration negotiated to renegotiate. That possibility, along with the Trump administration’s recent tariffs, is sowing uncertainty in the business community in Arizona and the Mexican state of Sonora, its neighbor to the south.
Former Canadian ambassador to Mexico Cameron MacKay said ending the USMCA agreement would risk job losses in highly integrated industries.
“I think the risk is higher prices for everything from commodities to consumer products at the end of the day, so the risk therefore is a lower standard of living for certain people in certain places,” MacKay said.
Billions of dollars worth of goods pass over the Sonora-Arizona border each year. The conference came just as Trump announced he was terminating trade talks with Canada, which his administration then restarted after Canada said it would drop a tax on U.S. tech giants.
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