White House economic council director confident in trade deals with Canada and Mexico

The White House’s top economic adviser says he expects to land favorable trade agreements with both Canada and Mexico, a notable expression of confidence given the turbulence that has defined North American trade relations in recent months.

National Economic Council Director Kevin Hassett pointed to positive momentum in negotiations with both countries, even as the US pursues an unconventional strategy: scrapping the existing trilateral trade framework entirely and replacing it with two separate deals.

The USMCA is dead, long live bilateral deals

The US-Mexico-Canada Agreement, which took effect in July 2020 as NAFTA’s successor, had a built-in six-year review deadline of July 1, 2026. The Trump administration decided not to renew it.

Instead of maintaining the three-country framework, the White House is betting that individual agreements with each neighbor will produce better outcomes for American workers and businesses. The new deals could potentially span a decade each.

The administration’s reasoning includes distinct concerns for each relationship, from fentanyl trafficking concerns to sector-specific trade imbalances.

Canada’s digital tax concession reopened the door

Trade talks with Canada hit a wall on June 27, when negotiations were temporarily suspended. The pause lasted all of three days.

By June 30, discussions resumed after Canada announced it would eliminate its digital services tax, a levy that had targeted US-based technology companies. That move removed one of the more contentious sticking points between the two countries and gave Hassett reason to highlight what he described as positive momentum.

The US currently imposes a 25% tariff on many imports from Canada, with energy imports facing a reduced rate of 10%. On the Mexico side, negotiations have been active across several critical sectors. Automotive rules of origin, steel and aluminum tariffs, agriculture, and economic security measures are all on the table. The 25% tariff applies to many Mexican imports as well.

What this means for markets and investors

The 25% tariffs currently in place on many imports from both countries are already flowing through to consumer prices and corporate margins. If negotiations drag on, those costs become embedded rather than temporary, forcing companies to make longer-term sourcing decisions that could reshape North American manufacturing patterns.

The absence of any cryptocurrency or digital asset component in these negotiations is also worth flagging for crypto investors watching trade policy for signals. These talks remain firmly in the traditional trade arena, focused on physical goods, tariffs, and legacy industry protections.

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