President Donald Trump appeared to soften threats to completely terminate the North American Free Trade Agreement (NAFTA) during a speech in Missouri on Wednesday, indicating the U.S. would ultimately maintain some sort of trade pact with Mexico and Canada, even if it’s not the current one.
“We're working right now on NAFTA, the horrible, terrible NAFTA deal that took so much business out of your state and out of your cities and towns,” Trump said. “We've got to change this deal. And hopefully we can renegotiate it, but if we can't, we'll terminate it and we'll start all over again with a real deal.”
The president has suggested that talks have been difficult between the three countries since the first round of renegotiation discussions concluded in Washington, D.C. earlier this month. He has tweeted multiple times within the past week that if satisfactory terms cannot be reached, the U.S. may terminate the agreement completely.
On Tuesday, Canadian Prime Minister Justin Trudeau appeared unfazed by Trump’s comments, indicating Trump may be employing a negotiating tactic.
However, Mexico’s Economy Minister Ildefonso Guajardo said that his country was working on a Plan B in the event that talks come to an impasse, saying he could not “rule out” Trump’s threat to withdraw from the agreement completely, according to Reuters.
On Wednesday, President Trump acknowledged that “Mexico is not happy”, but continued on to say the agreement has benefited the country’s economy at the United States’ expense for many years. According to the White House, since the implementation of NAFTA in 1994, the U.S. trade balance with Mexico has shifted from a surplus of $1.3 billion to a $64 billion deficit in 2016.
The next round of talks will be held in Mexico in September.