Trade Talks with Mexico Going Well; Canada Should Wait

U.S. President Donald Trump issued a fresh warning that he would slap auto tariffs on Canada if NAFTA talks fail.
Brendan Smialowski  AFP  Getty Images

U.S. President Donald Trump issued a fresh warning that he would slap auto tariffs on Canada if NAFTA talks fail. Brendan Smialowski AFP Getty Images

US President Donald Trump has warned Canada he would tax their auto exports if an agreement can not be reached with Ottawa. “Canada must wait. Their Tariffs and Trade Barriers are far too high.

The United States, Canada and Mexico have been renegotiating NAFTA for months after Trump threatened to withdraw from the agreement. Will tax cars if we cant make a deal!” he added. "Oftentimes, when you have to compromise with a whole bunch of countries, you get the worst of the deals", Kudlow has said.

Canada's ambassador to the US David MacNaugton told BNN Bloomberg TV that if the US and Canada can reach agreement on auto manufacturing then the three countries may be able to move forward on more of the issues that affect all three countries.

President Trump has said he prefers to end the decades-old NAFTA pact in favor of inking separate, bi-lateral agreements with the United States neighbors.

Bilateral NAFTA negotiations between the US and Mexico have been building momentum in recent weeks after taking a break in late May ahead of Mexico's July presidential election. Officials have essentially agreed that a new NAFTA trade deal would exempt existing Mexican auto plants from any "Section 232" tariffs.

To complicate matters, the already rocky Canada-U.S. relationship has deteriorated since the partners suspended talks in the spring. He has also made repeated threats to apply far more damaging tariffs on the deeply integrated automotive sector.

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On Friday, his critical tweet about Canada made a point of praising Mexico's president-elect Andres Manuel Lopez Obrador. "And in June, Trump called Prime Minister Justin Trudeau very dishonest and weak" shortly after he left the G7 meeting in Quebec.

The US and Mexico, which have been in bilateral negotiations for about three weeks, appear to be getting close to an agreement.

U.S. Trade Representative Robert Lighthizer and Mexican Economy Minister Ildefonso Guajardo have been meeting in Washington, D.C. for the last two weeks, with talks focused on rules for how much North American content should be included in cars, a pivotal issue in the trade discussions.

Canada could soon return to the talks, its ambassador to the U.S. said this week.

Guajardo stressed that the most hard issues had been left to the end, including the USA demand that NAFTA be approved every five years, a provision known as a sunset clause.

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