Politics

Trump Says U.S. Will ‘Terminate’ NAFTA if Talks Fail

President has stipulations about talks with Mexico and Canada

President Donald Trump threatened to withdraw from NAFTA if he, Canadian Prime Minister Justin Trudeau, shown here, and their Mexican counterpart are unable to renegotiate the pact. (Mark Wilson/Getty Images file photo)

Hours after his White House sounded a diplomatic tone about the United States’ future in a North American free trade pact, President Donald Trump issued a threat to Canada and Mexico.

While Trump thinks a new deal on the North American Free Trade Agreement is “very possible,” he tweeted Thursday that if a fair deal cannot be reached, “we will then terminate NAFTA.”

Senior administration officials worked Wednesday afternoon to tamp down what Commerce Secretary Wilbur Ross dismissed as a “rumor” that the Trump administration was preparing to withdraw from NAFTA. Trump even got on the phone with his Canadian and Mexican counterparts, and the White House issued a late-night statement saying a consensus emerged to renegotiate the trade deal that Trump pilloried as a candidate.

The White House’s “readout” of each call described his talks with Canadian Prime Minister Justin Trudeau and Mexican President Enrique Peña Nieto as “pleasant and productive.”

Trump agreed “not to terminate NAFTA at this time and the leaders agreed to proceed swiftly … to enable the renegotiation of the NAFTA deal to the benefit of all three countries,” the White House said.

“It is my privilege to bring NAFTA up to date through renegotiation,” according to a statement from the White House press office attributed to Trump. “It is an honor to deal with both President Peña Nieto and Prime Minister Trudeau, and I believe that the end result will make all three countries stronger and better.” 

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Trump, however, struck a much less diplomatic tone in a couple Thursday morning tweets.

 

The U.S. president started by noting the two leaders called him. He also claimed Trudeau and Peña Nieto requested that he avoid terminating the deal, and instead renegotiate it.

Trump tweeted that he “agreed,” but with a stipulation: “...if we do not reach a fair deal for all, we will then terminate NAFTA.” He declared a new deal as “very possible.” 

The threat to withdraw is consistent with his campaign rhetoric. But his new willingness to renegotiate the pact does not match the tough talk of a candidate and president who has called NAFTA “the worst trade deal” into which the United States has ever entered. Another seeming inconsistency: Trump wants "bilateral" trade deals with individual countries, not ones that tie the U.S. to terms negotiated by multiple other countries.

On Feb. 13, Trump stood beside Trudeau in the White House’s East Room and said he intended to make only small changes to NAFTA that focus on U.S.-Canadian trade.

“We have a very outstanding trade relationship with Canada. We’ll be tweaking it,” he said of the NAFTA language. “We’ll be doing certain things that are going to benefit both of our countries.” 

But the new U.S. president has had tougher words for Mexican leaders.

Trump has promised to build a wall along the U.S.-Mexico border and threatened a tax on Mexican goods when they enter the United States. He has said that America’s southern neighbor should expect bigger NAFTA changes.

Yet, in recent days Trump has fielded questions from bewildered reporters about whether his recent actions toward and statements about Canadian trade practices are moving the longtime friendly neighbors toward a trade war.

A week ago, he also blasted Canada for practices he labeled as “disgraceful” that he says have hurt dairy farmers in Wisconsin and upstate New York.

Trump signaled his administration could be opening trade talks with Canadian officials soon over lumber, timber and energy practices, in addition to dairy issues.

“We’re going to have to get to the negotiating table with Canada very, very quickly,” he said then.

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“What happened to our dairy farmers in Wisconsin and New York State — we’re not going to let it happen,” the president said, sounding like the “America first” president again. “We can’t let Canada or anybody else take advantage and do what they do to our workers and to our farmers.”

On Tuesday, the Trump administration slapped tariffs on Canadian lumber for what it concluded is the country’s “dumping” of softwood lumber in the U.S. markets at reduced prices that are unfair to American companies.

The U.S.-Canadian dispute over softwood lumber and dairy products shows that NAFTA should be renegotiated sooner rather than later, Ross told reporters Tuesday in a bit of foreshadowing. Ross said Trump administration officials concluded America's northern neighbor, with its lumber tactics, "violated legitimate practice."

Trump’s ratcheted-up rhetoric and actions against Canada have increased tensions not only with America’s northern neighbor, but its second-largest trading partner. 

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