U.S. President Donald Trump's administration said it will not renew the U.S.-Mexico-Canada Agreement (USMCA), opting instead to begin negotiations on amendments to the trade pact, a move that could eventually lead to separate bilateral agreements with Canada and Mexico.

Axar.az reports, citing NBC, that a senior administration official said the decision was driven by concerns that the agreement failed to reduce U.S. trade deficits with its North American partners despite modernizing trade rules.

"The agreement did succeed in modernizing the agreement. But with respect to rebalancing, our trade deficits with both Mexico and Canada shot up during the Biden administration," the official said.

"We've started to get it under control, but we believe that the USMCA did not operate to control the deficit like the president intended, so that's really the heart of it," the official added.

The administration said the review process is intended to ensure any future agreement continues to "put America first," while emphasizing it does not intend negotiations to last the full decade allowed under the review framework.

Canadian Trade Minister Dominic LeBlanc said Canada remains committed to the pact.

"Canada approaches these discussions from a position of strength and with the goal of preserving and strengthening one of the most successful trading relationships in the world," LeBlanc said, noting the agreement remains in force until 2036 and can still be renewed.