President Trump accused Canada and Mexico of being “very difficult” in renegotiating the North American Free Trade Agreement and threatened anew to terminate the deal yesterday — an ominous or hopeful prospect for companies and investors, depending on the sector.
Ahead of the second round of NAFTA renegotiations — set to begin Friday in Mexico City — Trump tweeted yesterday, “We are in the NAFTA (worst trade deal ever made) renegotiation process with Mexico & Canada. Both being very difficult, may have to terminate?”
The U.S., Mexico and Canada began formal negotiations earlier this month to rework the 23-year-old trade pact that Trump blames for hundreds of thousands of lost U.S. factory jobs. Trump said at a rally last week in Phoenix that he would “end up probably terminating” NAFTA “at some point.”
Experts said Trump is trying to signal a willingness to walk away, one of his trademark negotiation tenets, and that the possibility would have varied consequences.
Joel Trachtman, professor of international law at Tufts University’s Fletcher School, said eliminating NAFTA would introduce tariffs on products like cheap Mexican steel and make American-made steel more competitive, but could also cut demand for U.S.-grown corn that’s seen exports to Mexico skyrocket under NAFTA.
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