It replaces the 24-year-old North American Free Trade Agreement, which Trump has lambasted as a job-wrecking disaster that has hollowed out the nation's industrialized base.
"It'll probably or possibly be just USM".
The Canadian sectors most affected by the deal, particularly dairy producers, criticized the government Monday.
The president has admitted there was "a lot of tension" but said it didn't affect negotiations.
The terms reached between the USA and Mexico on higher wage thresholds will also be positive for Canadian producers, said Unifor president Jerry Dias, who welcomed the deal.
US-Canada talks bogged down earlier this month, and most trade analysts expected the September 30 deadline to come and go without Canada being reinstated. Kushner played a similar role with Mexico - in that case, his close relationship was with Luis Videgeray, the Mexican foreign secretary, helped propel those talks to fruition.
Donald Trump says the new trade deal struck with Canada and Mexico is "the most important" ever agreed by the US.
"When this got started, Canada was the teacher's pet and Mexico was the problem child", said Michael Camunez, president of Monarch Global Strategies and a former U.S. Commerce Department official. It was unclear, however, whether he had authority from Congress to pursue a revamped NAFTA with only Mexico, and some lawmakers said they wouldn't go along with a deal that left out Canada.
The agreement will give the U.S.an expanded 3.6 per cent market access to the domestic dairy market and will also eliminate competitive dairy classes.More news: Sulawesi quake chaos: Tsunami survivors beg government for food and evacuation
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Trump said he would sign the final agreement in late November, in about 60 days, and the pact is expected to be signed by Trudeau and outgoing Mexican President Enrique Pena Nieto before he leaves office December 1. From 2020, cars must have 75% of their parts manufactured in Canada, Mexico or the United States to qualify for zero import tariffs - a substantial jump from the current 62.5% requirement.
Still, "I think he played a weak hand moderately well", he said.
Last week, at the U.N., Trudeau tried to downplay what looked like a frosty exchange between the two leaders during a luncheon.
While Peter Navarro, the director of the White House National Trade Council, said the new deal means that "NAFTA is dead", the USMCA still retains large swaths of the original deal.
Trump blames NAFTA for the loss of American manufacturing jobs and wants major changes to the pact, which underpins $1.2 trillion in annual trade.
The two countries will now join Mexico in updating the 1994 accord, which will be renamed the United States-Mexico-Canada Agreement.
"Though markets were already anticipating an agreement, one source of worry will be swept away if a deal is made", Yukio Ishizuki, senior currency strategist at Daiwa Securities in Tokyo, said.
He has adopted an "America First" policy and launched a trade war against China, as well as imposed tariffs on steel and aluminium imports from Mexico and Canada.
"So instead of it being the US, it would be high-wage labour, which of course includes Canada, and suddenly the USA and Canadian interests were aligned and this was a deal that Canada could do" Freeland said. Automakers looking to avoid duties on vehicles imports will need to use a higher percentage of North American auto parts and pay workers more, a provision created to make US labor more competitive.
The deal comes despite Donald Trump's multiple trade wars, which have seen the United States president impose taxes on imports from both Canada and Mexico, bringing retaliation in kind.
But Canada also had to agree to offer more access to its highly protected dairy market, which infuriated the influential farming lobby.