Business and political leaders are bracing for another Trump administration-style trade showdown as efforts stumble to renegotiate the trade agreement among the United States, Mexico and Canada.

U.S. discussions are continuing with Mexico, but America has iced out Canada in the trade talks with less than two months until the countries must agree to extend the agreement or trigger annual revisions.

It’s unclear whether this is a negotiating tactic by President Donald Trump’s team or a sign of a more serious fissure between the United States and Canada that could jeopardize a new agreement.

“It’s classic Trump bullying,” William Alan Reinsch, under secretary of commerce for export administration during the Clinton administration, told NOTUS. “What you’re going to see between now and July 1 is a lot of drama, a lot of threats, threats to withdraw, threats to break it up, threats to negotiate separately, threats to exclude one or the other, and then maximal demands on what he wants to concede.”

“It’s just going to be a series of threats,” continued Reinsch, a nonresident scholar at the Center for Strategic and International Studies. “That’s the way he operates. I think the other countries have figured that out by now, and so we just have to see how it plays out.”

Throughout his second term, Trump has threatened tariffs against Canada — a longtime ally of the United States and a top trading partner — in an attempt to leverage various outcomes, from digital regulations to rejecting recognition of a Palestinian state.

U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick have both expressed frustration with Canada’s embargo on American spirits in government-owned liquor stores and the northern neighbor’s broader negotiation style.

“Think about it this way: There are two countries that have retaliated economically against the United States in the past year, the People’s Republic of China and Canada,” Greer told the House Ways and Means Committee in April. “So that’s kind of the company that they’re running in.”

In that same hearing, Greer said he supports the United States-Mexico-Canada Agreement — signed during Trump’s first administration to replace the North American Free Trade Agreement — and that he would notify Congress of the administration’s intentions on the deal by June 1.

The USMCA stipulates that the three countries must make a decision by July 1, though Greer has already indicated that he expects negotiations to extend beyond that mark. If all parties can come to an agreement, the USMCA will be extended for 16 more years. If all parties fail to reach an agreement, it would trigger up to 10 years of annual negotiations, a situation that business leaders warn would inject a massive amount of uncertainty into the North American trade landscape.

“It wouldn’t be as bad as if [Trump] withdrew. It would be bad because of the uncertainty it creates. What this agreement has really been about, and NAFTA that preceded it, it’s really been about investment,” Reinsch said. “What NAFTA did, and what USMCA has continued to do, is reassure the all three business communities that you can safely invest in these — in all three countries, and make sure that your assets are going to thrive.”

Trump could still withdraw from the pact, though experts NOTUS spoke to view this as the least likely option.

Allison Smith, a former U.S. trade official who is now vice president at Lot Sixteen, a lobbying firm that works on trade issues, told NOTUS that the industries that depend on the USMCA are closely watching the Trump administration’s statements and actions on the issue.

“The president called USMCA ‘irrelevant,’ and USTR has identified a lot of issues they’re looking to resolve through USMCA’s joint review. At the same time, industries are looking for business certainty,” she said. “They would prefer the continuation of the USMCA, but everyone understands changes are going to align with the administration’s priorities and are trying to work productively to inform what those potential changes look like.”

Members of Congress and business leaders are urging the Trump administration to make a deal favorable to the United States.

“We continue to advise clients that while July 1 is a key date for the USMCA review, it is more likely the negotiations will continue in the months ahead, so businesses and stakeholders should continue to engage the administration on both the importance of the agreement and updates that can bolster domestic manufacturing and production and support U.S. industries,” Smith said.

A bipartisan coalition of senators is pushing for a renewal of USMCA, including Steve Daines of Montana, Amy Klobuchar of Minnesota, John Boozman of Arkansas and Raphael Warnock of Georgia.

“The United States is currently the world’s largest agricultural exporter, with total agricultural exports valued at $176 billion in 2024,” the senators wrote in a letter to Greer in April. “Farmers, ranchers, processors, and exporters throughout the supply chain have been broadly supportive of USMCA and the certainty it provides.”

In addition to expanded market access for U.S. agricultural exports, the Trump administration is also expected to seek changes to “rules of origin,” aimed at preventing third-party countries from using Canada and Mexico as export hubs to move goods into the United States. That’s in addition to long-standing issues like lumber and dairy.

Rep. Debbie Dingell, a Democrat from Michigan who helped get the USMCA across the finish line during the first Trump administration, and is backing a renegotiation, told NOTUS that the deal is one of her top priorities — as well as an area of concern.

“I’m worried about the Canadian-American relationship, and I want to make sure we’re building it and help both the prime minister and the president know that we have a shared interest,” she said.

Mexico and Canada are top trading partners to the United States, with bilateral trade topping $800 billion, according to the Brookings Institution. Similarly, the majority of exports from Canada and Mexico are to America. U.S. exports to Canada and Mexico support millions of domestic jobs generating trillions of dollars, industry groups say.

Trump has signaled that his interest in the trade deal is only to boost American jobs.

“I don’t even think about USMCA,” Trump said at a Michigan Ford plant in January. “I mean, you know, I want to see Canada and Mexico do well, but the problem is we don’t need their product. You know, we don’t need cars made in Canada. We don’t need cars made in Mexico. We want to make them here. And that’s what’s happening.”