Trump Warns Canada as He Strikes a Deal With Mexico

President wants to replace NAFTA, says Canada might be left out
By Newser Editors and Wire Services
Posted Aug 27, 2018 11:44 AM CDT
Updated Aug 27, 2018 1:40 PM CDT
Trump: We've Got a Deal With Mexico to Kill NAFTA
President Trump talks on the phone with Mexican President Enrique Pena Nieto in the Oval Office of the White House Monday.   (AP Photo/Evan Vucci)

The Trump administration and Mexico have reached a preliminary accord to end the North American Free Trade Agreement and replace it with a deal that the administration wants to be more favorable to the United States, per the AP. President Trump, in announcing the tentative agreement Monday at the White House, said a new deal would be called "the United States-Mexico Trade Agreement." Trump has frequently condemned the 24-year-old NAFTA trade pact as a job-killing "disaster" for the United States. Still, any new agreement is far from final. The administration still needs to negotiate with the third partner in NAFTA, Canada, to become part of any new trade accord. Without Canada, America's No. 2 trading partner, it's unclear whether any new US trade agreement with Mexico would be possible. Trump said he'd be calling Prime Minister Justin Trudeau.

"If they'd like to negotiate fairly, we'll do that," said Trump. "We could have a separate deal (with Canada) or we could put it into this deal." Trump put pressure on Canada by threatening to tax Canadian auto imports and to leave Canada out of a new regional trade bloc. Among other things, Mexico has agreed to ensure that 75% of automotive content be produced within the trade bloc (up from a current 62.5%) to receive duty-free benefits and that 40% to 45% be made by workers earning at least $16 an hour. It remained unclear where Monday's announcement leaves Canada. "Canada is encouraged by the continued optimism shown by our negotiating partners," says a foreign ministry spokesperson. "Progress between Mexico and the United States is a necessary requirement for any renewed NAFTA agreement."

(Read more NAFTA stories.)

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