2026-02-11 15:21:00
This is a notable comment from Mexican President Claudia Sheinbaum who said she does not believe that Trump with withdraw the US from the USMCA trade agreement.
Earlier today, a report from Bloomberg said Trump is privately musing about exiting the North American trade pact, citing problems with Canada in particular.
The president has asked aides why he shouldn’t withdraw from the
agreement, which he signed during his first term, though he has stopped
short of flatly signaling that he will do so, according to the people
who spoke on condition of anonymity to describe internal discussions.
The report led to some earlier selling in the Canadian dollar, boosting USD/CAD from a session low near 1.3500 to 1.3550. The US dollar rose further to 1.3600 after a strong US jobs report but it’s since faded to 1.3576.
USDCAD 10 mins
Now I suspect this is all posturing and the market is largely ignoring it. It also ignored Trump’s bizarre threats about a US-Canada bridge yesterday. It’s something I spoke with Reuters about.
A couple of things that have happened in Congress are telling:
1) Jamieson Greer’s closed-door hearing
On Dec
17-18, the USTR seemed to indicate that it would pursue staying in the
agreement and extending it but it would be contingent on changes. This flew under the radar but it was telling, particularly since he briefed Congressmen in private. I take that as a sign that he told them not to worry.
2) Congress is going to vote against tariffs
The cost of living increases aren’t going away as a tariff issue and this week, three Republican House members broke ranks and struck down a motion to block anti-tariff votes until July. Moreover, a move to blow up USMCA (a Congressional-approved deal) would be an even-bigger fight.
All that said, Trump announcing and pursuing leaving USMCA is certainly possible. In particular, he could announce a withdrawl and try to renegotiate in the six-month window that’s mandated. That would put maximum pressure on Canada and Mexico, but would also reverberate back into economic uncertainty in the US.
