He added: “One way or another we’ll have a deal with Canada. It’ll either be a tariff on cars or it’ll be a negotiated deal. Frankly, a tariff on cars is a much easier way to go. Perhaps, the other would be much better for Canada.” A tariff on Canadian auto imports to the U.S. would make cars more expensive for American consumers.
Monday’s remarks fit the pattern of Trump’s international negotiations. They showed his preference for dealing with countries one-on-one rather than through multilateral institutions, a tendency he’s displayed in trade negotiations with Europe as well. And they also showcased a strategy where Trump bluffs, rebrands, and claims victory. It’s not clear Trump can actually terminate NAFTA without congressional approval; he signaled his dislike of the agreement’s “connotations,” and he declared his arrangement with Mexico “an incredible deal for both parties.”
But what it may amount to in the end is some tweaks to the existing agreement—albeit ones that concern some of the most significant issues in the U.S. trade relationship with Mexico. Among these is the auto industry. The two countries agreed on steps that would, in effect, stimulate American manufacturing. The auto negotiations, the Toronto Star reported, had become contentious, which is part of the reason they didn’t include Canada. Other details of the deal with Mexico, and any agreement with Canada, will likely emerge in the coming days and weeks.
A senior administration official, speaking to reporters after Trump made his remarks, explained Trump’s comments on NAFTA this way: “Whenever you have an agreement that supplants another agreement, you have to pause or get rid of the prior agreement,” the official said. “How we do that is something we’re still in the process of looking at.”
How NAFTA explains the two Mexicos
The official downplayed suggestions that the bilateral agreement with Mexico was meant to put pressure on Canadian Prime Minister Justin Trudeau. “We were in a position where we had negotiations that went on for close to a year. In the last ... several weeks, we decided we were better off to try to get a deal with one party and then hopefully the other,” the official said. “It tends to be the way these things work in any event. It’s hard to have three people all just have a lightbulb go off at the same time.”
The official noted that U.S. and Canadian negotiators had discussed the issues for thousands of hours both bilaterally and with Canada. “It’s not like Canada is coming in at the last minute. They know the issues,” the official said. “We talked about all those issues and I think this is a normal, orderly way to arrive at an agreement with three people.”
The other parties to NAFTA, for their part, are not speaking as if the agreement is going away. A statement from the Canadian prime minister’s office said Justin Trudeau had spoken Sunday to Peña Nieto, the Mexican president, and agreed that NAFTA was a trilateral agreement—a tweet from Peña Nieto said Mexico hoped for a “successful trilateral negotiation of NAFTA this week.” It is unclear whether Mexico will go along with the agreement if Canada is not party to it. A spokesman for Chrystia Freeland, Canada’s foreign minister, said: “We will only sign a new NAFTA that is good for Canada and good for the middle class. Canada’s signature is required.”