The negotiations that remade the North American Free Trade Agreement were, as one participant put it, a series of “near-death” experiences. For more than a year, starting in 2017, envoys from the United States, Canada, and Mexico met to determine the future of a trade alliance worth trillions of dollars. They clashed over everything from labor laws to the minutiae of duty-free imports, while repeatedly deflecting President Donald Trump’s threats to withdraw from the agreement. In the fall of 2018, they were finally prepared to sign what came to be known as the United States-Mexico-Canada Agreement. First, though, they needed to decide how long the accord should last.

NAFTA was what is called a “forever deal”—as with all of America’s major trade agreements, its terms were permanently fixed. This frustrated Trump’s trade czar, Robert Lighthizer, who believed that NAFTA had resulted in thousands of job losses and a ballooning trade deficit. Lighthizer wanted the U.S.M.C.A. to have an escape hatch: a review mechanism, or perhaps a fixed term. So he proposed that the agreement expire after four years.

In his book, “No Trade Is Free,” Lighthizer described his offer as “an aggressive opening bid.” Mexican and Canadian officials thought that it was insane: no business would expose its investments to a deal that could end so quickly. Even prominent Republicans expressed opposition. But Lighthizer found an ally in Jared Kushner, Trump’s key adviser on Mexico. Kushner had come to see trade negotiations as a game of mutual bluffing; the key to success, in his view, was getting your counterparts to “believe you are going to jump off a cliff.”

On August 25, 2018, Kushner invited Mexico’s foreign minister, Luis Videgaray, to his home in the upscale Washington, D.C., neighborhood of Kalorama. As he recalled in his own memoir, “Breaking History,” negotiators were scheduled to meet the next morning, and both sides were short on time: the Americans were eager to send the agreement to Congress before the midterm elections, and the Mexicans needed to reach a deal before a new President came into office.

Kushner made a proposal that he had cleared with Lighthizer. The agreement would remain in place for sixteen years, but, after six years, the countries would convene for a review. “If the parties agreed to an extension,” Kushner suggested, “the term of the agreement would reset for another sixteen years.” If they disagreed, “a ten-year termination clock would start to tick.” Videgaray left after midnight, having agreed to consult with the Mexican President, Enrique Peña Nieto.

In the morning, everyone gathered in Lighthizer’s office, across from the White House. “Let me share a proposal,” Kushner began—a theatrical gesture, since Trump and Peña Nieto had already been briefed on the plan. By the meeting’s end, negotiators had agreed to include a review mechanism, ending more than a year of gruelling talks. Soon, Trump stood in the Rose Garden, hailing the U.S.M.C.A. as “the most modern, up-to-date, and balanced trade agreement in the history of our country.”

For Mexican officials, one of the keys to accepting the deal was that the review would be triggered after six years rather than four: they predicted that Trump would serve two consecutive terms and leave office before the deadline came. In the meantime, they reasoned, the treaty would shield their nation’s economy from a hostile Administration. They turned out to be wrong. Trump returned to the White House four years later than expected, and the review of the U.S.M.C.A. is scheduled for next July, just seven months away. In Trump’s second term, his protectionist agenda has been even more aggressive and erratic than before. Most indications suggest that what will take place between now and the summer is less a review of America’s crucial trade relationships than a wholesale renegotiation.

In the years since the U.S.M.C.A was signed, Mexico and Canada have become America’s top trading partners. Millions of jobs depend on this economic alliance, which exceeds $1.8 trillion in trade. Officials are already shuttling between their various capitals for conversations about what the parties might get from it.

As the talks got under way, I sat down with Ildefonso Guajardo Villareal, a former secretary of the economy who led Mexico’s negotiations of the U.S.M.C.A. during his term. A short, dapper man of sixty-eight, Guajardo has been involved in every major trade accord that Mexico has signed since NAFTA. He built a reputation as a fearsome negotiator, once praised by Kushner for his ability to spin “technical issues into unsolvable deal-breakers.” Now he seemed pleased to be out of the fight. “I’ve got a trip coming up to Palm Beach,” he told me, in an airy cafeteria in Mexico City.

In 2018, Guajardo said, “It was clear to me from the beginning that time would be our best ally.” He left the most contentious points—including the sunset clause—for the end. Like his Canadian counterparts, he was focussed on securing modest updates on matters such as digital commerce while leaving the treaty largely intact.

Guajardo’s tactic worked: while he stalled, corporations and politicians came to influence Trump’s thinking. “There is the misconception that power in Washington is monolithic, when, in fact, it is a complex interweave of interests,” Guajardo said. In the spring of 2018, Trump decided to impose tariffs on imports of steel and aluminum from Mexico. “We responded in kind,” Guajardo said. “Mexico imposed a range of tariffs, targeting key products in Republican districts, like bourbon—and it clearly caused a stir inside the White House.”

Ultimately, Mexico and Canada managed to defend their interests. “The U.S.M.C.A. is not what I would characterize as a paradigm-changing agreement, in any shape or form,” Joshua P. Meltzer, a senior fellow in the Global Economy and Development program at the Brookings Institution, said. “The fundamentals, which are zero tariffs between the three countries, remained as they were under NAFTA.”

But Trump seems resolved to change that. “The mandate is really different today,” a former senior U.S. official who was involved in the 2018 negotiations told me. “Trump is going to want Canada and Mexico to pay something to access this market. We’re the biggest consumer market in the world. The dependencies that both countries have on us are enormous.” Trump seems unconcerned that extorting his partners contravenes the principles of what was designed as a free-trade accord. “I really don’t think that Trump cares about the agreement very much at all,” the official added. “He wants the U.S. itself to be a free agent.”

Trump spent the first half of 2025 roiling Mexico’s economy with scattershot demands. In March, he imposed a twenty-five-per-cent tariff on almost all Mexican imports—then, two days later, carved out an exception for goods covered by the U.S.M.C.A. By July, Trump was talking about raising the tariff rate to thirty per cent. He ultimately postponed, under the condition that Mexico address a list of more than fifty demands, ranging from access to lithium resources to expedited visas for U.S. representatives. This week, Trump issued a new threat: Mexico needed to transfer some sixty-five billion gallons of water to the U.S., under a long-standing treaty on water; failure to do so by the end of the year would trigger an additional five-per-cent tariff.

Thus far, Mexican officials have declined to retaliate against the tariffs, despite Trump’s flagrant violation of the U.S.M.C.A. “The Mexican government has adopted the stance that it isn’t in its interest to antagonize Trump,” Guajardo said. Officials have instead worked to reassure the public, even as the effects of economic fragility begin to show: stalled investments, closing auto plants, thousands of workers laid off. “If you begin a negotiation by telling business leaders that there is no other option, under a free-trade agreement, than acquiescing to tariffs—well, it’s dismaying, to say the least,” Guajardo said. “I get it, Trump’s attitude has changed. But if you kick off talks by signalling to the other side that you’re prepared to swallow such a bitter pill, then your margin of negotiation shrinks to zero.”

Meltzer is less convinced that Mexico can afford an aggressive posture. “The reality of the trilateral relationship is the U.S. holds practically all the cards,” he said. It doesn’t help that there are fewer people around Trump who argue for the virtues of free trade. In 2017, as Trump was preparing to sign an executive order announcing his intention to withdraw from NAFTA, his advisers summoned Sonny Perdue, the Secretary of Agriculture, to the White House. Perdue rushed over carrying a visual aid: maps showing the overlap between the areas that would be hardest hit and the counties where Trump had won. “These are your people,” Perdue said. By day’s end, the President had announced that the U.S. would remain a party to the agreement.

Today, Guajardo argued, the people handling the negotiation wield less influence, and they are less knowledgeable. “You can accuse Lighthizer of being a protectionist, but he is an authority on trade,” he said. “The only person with direct access to the White House these days is Howard Lutnick—and he’s utterly clueless.” In 2018, Kushner’s relationship with Videgaray was a crucial palliative, as the two men worked to resolve disputes behind the scenes. “They kept the blood from infesting the river, so to speak,” Guajardo said. Now Kushner is busy seeking a peace deal between Ukraine and Russia, and building an A.I. firm with Videgaray.

There is, however, one person who has had some success in managing Trump: Claudia Sheinbaum, the Mexican President. When Trump applied economic pressure on Mexico earlier this year, Sheinbaum deflected his threats with concessions on security. “Dumping everything into one bag—trade, narcotics, and immigration—is far from the ideal scenario,” Guajardo said. “But it’s become clear that Mexico’s actions on enforcement can help improve the terms of the negotiation.” It is no secret that Trump makes foreign-policy decisions based on his personal feelings about world leaders, and he seems to like Sheinbaum. “The best thing that President Sheinbaum can do is own the negotiation with Trump,” Guajardo said.

I asked Guajardo if there was still time for Mexico to draw its own red lines. “There should be,” he said, tentatively. In 2023, Mexico became the largest supplier of goods to the U.S., as manufacturers moved operations there to be closer to the American market. Trump needs Mexico, and its low-cost industrial base, in order to compete against China. “The level of economic integration in North America—and the leverage that Mexico has on manufacturing—is substantial,” Guajardo said. “And it will continue to be, with or without Trump.”

China has often been referred to as the U.S.M.C.A.’s uninvited fourth party. For the U.S., a key goal of the negotiations is to prevent China from circumventing tariffs by moving goods through Mexico or Canada. “The U.S. is going to push for much closer alignment on its China trade policy,” Meltzer said. The complication, he added, is that “we don’t even know what U.S. trade policy on China looks like at the moment.”

Still, Mexico has recently shown a willingness to appease Trump. After his reëlection, Mexico imposed a thirty-five-per-cent tariff on imported Chinese apparel and cracked down on retailers that violated trade rules that benefitted the U.S; it also rolled out a program designed to substitute Chinese imports with domestic goods. Marcelo Ebrard, Mexico’s current economy secretary, declared that reducing imports from China is his government’s “main objective.” But not everyone welcomed these initiatives. When Sheinbaum proposed expanding tariffs against China, it was met with fierce opposition in Mexico’s Congress. Legislators, along with business leaders, questioned whether their country should compromise its ties to China when its other major trading partner was so volatile.

These questions underline one of the great paradoxes of the U.S.M.C.A.’s revision: the three countries need to work together to compete with China, but Trump’s tariffs discourage meaningful coöperation. Nowhere is this clearer than in the competition for the minerals which are used to produce everything from batteries to smartphones. China dominates the market for these critical resources. Yet, as Bentley Allan, a political scientist at Johns Hopkins, noted, “If you look collectively at Mexico, the United States, and Canada, they have everything that you need.” Alaska, for example, has vast deposits of zinc, which is refined in British Columbia; the process spins off germanium, a crucial component in semiconductors.

China, however, has far greater refining capacity and a significant head start in mining. For North America to supply itself, Allan said, “We have to achieve scale and work collectively—not just because the minerals are scattered around geologically but also because we need to deploy a lot of capital.” It can take as long as fifteen years for a mine to become operational, and ramping up a country’s refining capacity is immensely costly. China’s production of minerals is also heavily subsidized; in order to compete, the North American countries need to agree on a price floor and keep it in place.

This requires a level of coördination that is at odds with Trump’s vision. Indeed, his tariffs have given his neighbors a reason to seek more reliable partners. If Canada and Mexico align their trade policies with the U.S., there is no guarantee that Trump won’t try to extract more concessions from them in the future—on trade or on almost any other subject. “It’s hard for anybody to plan based on the tariff structure that currently exists,” the former senior official said. “The one thing the President’s never going to be able to give them is certainty.”

For the moment, Canada is fighting harder, or at least more publicly, than Mexico. The Canadian Prime Minister, Mark Carney, describes the trade situation as a “rupture” with the U.S. His government has not only responded to Trump’s tariffs in kind; it has also worked to find new partnerships across Asia and Europe. “This is existential for us,” Tim Sargent, a former Canadian Deputy Minister of Trade who took part in the U.S.M.C.A. negotiations, told me. He saw a marked departure from 2018: Trump is now focussing more intently on Canada, and negotiators are contending with tariffs on everything from steel to lumber, ostensibly in the interest of national security. Sargent noted wryly, “It’s really stretching the imagination to think that lumber has national-security implications for the United States, unless the U.S. Navy is going to move back to wooden ships.”

This fall, Ontario’s provincial government aired a television ad that featured a recording of Ronald Reagan saying that tariffs “hurt every American worker and consumer.” Trump deemed the ad a “hostile act,” called off talks, and announced an additional ten-per-cent tariff on Canada. Even people in Trump’s camp said that this kind of volatility limited the scope of negotiation. “If we’re raising tariffs because the Premier of Ontario is showing a stupid ad, there’s no way we could give them the kind of certainty we would need in order to have a more ambitious agreement,” the former senior official said. If anything, Trump’s aggression made the Canadians more willing to endure tough bargaining. “There’s a feeling that our country is under threat, and it is a bit of a wartime atmosphere,” Sargent added. “In wartime, people are willing to suck it up.”

Last week, Trump suggested that he would exit the U.S.M.C.A.: “We’ll either let it expire or, well, maybe work out another deal with Mexico and Canada.” Some observers discount Trump’s bluster as mere gamesmanship. “The White House likes a tense, doom-and-gloom scenario, because then it can sell any outcome as a victory,” one Mexican official told me. Others predict that Trump will continue threatening to withdraw from the treaty, but will ultimately find it too politically difficult. He returned to the White House on a promise to create jobs and lower prices—to make the country “boom like we’ve never boomed before.” Instead, tariffs are fuelling inflation, and many experts believe that it is only a matter of time before the economy starts hemorrhaging jobs. “In any negotiation, there’s two things that matter,” Sargent said. “First is what economists call the outside option—if the deal falls apart, then what? The other thing that matters is how impatient you are.”

As in the previous round of negotiations, time does not appear to be on Trump’s side, particularly with the Supreme Court weighing a challenge to his tariff regime and with Republican leaders increasingly concerned about the coming midterm elections. But, Sargent suggested, it was still possible for Trump to cause havoc in the markets. “Last time, the goal was to get the deal—once we got the deal, we thought everything would be fine,” he said. “People are now realizing that, as long as Trump is in the White House, there really is no definitive end to the uncertainty. He’ll have significant power to impose tariffs. And the mere fact that we have a comprehensive trade agreement with his signature on it won’t stop him.” ♦