President Donald Trump today announced that the United States and Mexico have reached an agreement to change portions of NAFTA, marking the conclusion of bilateral talks between the countries regarding the historic trade deal.
“This was something that people thought just wouldn’t happen because of all of the different factions, all of the different sides and the complexity,” President Trump said during a press conference call in the Oval Office, joined by Mexican President Enrique Peña Nieto via conference call. “We made it much simpler [and] much better for both countries.”
President Trump has been highly critical of NAFTA during his time in office, notably referring to the trilateral trade agreement — between the U.S., Mexico and Canada — as “the worst deal ever made” and threatening to terminate it altogether several times. (Trump signed an agreement to renegotiate NAFTA in January 2017.)
“I like to call this deal the United States-Mexico Trade Agreement,” Trump told reporters today of the new agreement. “I think it’s an elegant name. I think NAFTA has a lot of bad connotations for the United States because it was a rip off. It was … a horrible deal for our country. It’s got a lot of bad connotations [for] a lot of people.”
Trump added that he would start talks with Canada “shortly” but was uncertain whether there would be a separate bilateral deal.
“I’ll be calling the prime minister [of Canada] very soon and we’ll start negotiations — and if they’d like to negotiate fairly, we’ll do that,” Trump said. “They have tariffs as high as 300 percent of some of our dairy products — so we can’t have that. … With Canada, frankly, I think the easiest thing we can do is tariff their cars comes coming in. It’s a tremendous amount of money and it’s a very simple negotiation — it could end in one day and we take in a lot of money the following day.”
Either way, the president said his administration would “give [Canada] a chance to have a separate deal … or we could put it into this deal.”
Matt Priest, president and CEO of the Footwear Distributors & Retailers of Americas, stopped short of praising today’s announcement, calling the news “just another step in a lengthy process that must ultimately include Canada to maintain a unified North American marketplace.”
“It is our hope that these negotiations are wrapped up soon and that the Trump Administration pivots to even more substantive free-trade agreement negotiations with our industry’s largest trading partner countries,” Priest told FN. “It is also vitally important that the U.S. government ceases the needless trade war it has started with China. Take these actions, and the American footwear industry and our consumers will be in an even better position for substantive growth.”
The American Apparel & Footwear Association cheered the conclusion of the talks between Mexico and the U.S., referring to it as “a positive step in the NAFTA negotiations,” but also cautioned that “it is essential that the updated agreement remain trilateral.”
“We encourage the administration to share the details of the agreement so the business community can inspect the impact on North American supply chains and share feedback with the administration [sic] and Congress,” said AAFA president and CEO Rick Helfenbein. “It is important to remember that the existing NAFTA works well for the apparel and footwear industry and its nearly 4 million U.S. workers, while at the same time providing real value to our U.S. consumers. Any update to the agreement must continue to support these American jobs, promote trade linkages and be seamlessly implemented to be considered a success. It is with this in mind that we are deeply concerned to hear any mention of withdrawal or termination of the existing agreement at this late stage.”
Following months of tariff threats and a generally contentious trade environment, U.S. markets rallied on the news of an agreement, with the Dow Jones Industrial Average ending the day up 260 points to 26,049; the S&P 500 in the green 22 points to 2,896.74; and the Nasdaq up 72 points to 8,017.90.