US, Mexico reach trade "understanding", Trump threatens to cut out Canada

"It is hard to extrapolate much out of it, as the United States continues to treat each country and deal on its own merit".

Much of the business world has been anxious about Trump's trade policies, and the stock market reacted positively to the news of a deal.

The US-Mexico Trade Agreement is "a really good deal for both countries", Trump said before telephoning Mexican President Enrique Peña in the presence of the media.

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Mr. Peña Nieto called the new pact "something very positive for the United States and Mexico". The U.S. and Mexico have reached a preliminary agreement to revise key portions of the arrangement, the New York Times reports, leaving out Canada altogether for now. An aide to former Conservative trade minister Ed Fast argued that the only way Congress might approve such a deal is if Canada walked away from the negotiations, which the Trudeau government has consistently ruled out.

Monday's announcement puts Canada in a hard spot. Moran said he was pleased by the deal but insisted Trump needs to re-engage with Canada, calling it the top export market for Kansas. Now, that dynamic has broken down, with the Canadians shunted to the outside, deciding - alone - how to respond to these latest moves. Canadian Foreign Minister Chrystia Freeland said early Monday that Canada must sign off on any new three-way trade agreement, and she cautioned that it would only sign a new agreement that was good for her country. While the country posted its best month of worldwide trade ever in June - with a record level of exports headed south of the border - a significant hit to the trade file could jeopardize that performance, Shenfeld cautioned.

A major part of the agreement surrounds import taxes on cars.

The improved trade outlook was also boosted by news that Washington was pressing the European Union to accelerate tariff talks.

President Trump signaled a deal was close at the end of last week and did so again before the announcement Monday morning.

US Senator John McCain dies aged 81
In a dramatic turn, he later cast the deciding vote against the Republican health care bill , earning Trump's enduring wrath. Former presidents, including those who blocked Mr McCain's own White House ambitions, offered emotional tributes.

Following Trump's announcement, Trudeau's office issued a statement saying the prime minister spoke with Pena Nieto on Sunday about NAFTA's renegotiation and "shared their commitment to reaching a successful conclusion to this agreement for all three parties".

"We'll have a formal news conference in the not-too-distant future", about the trade pact, Trump said to Pena Nieto. When combined with the fact that we pay for most of their defense through NATO, Europe has benefited greatly from past USA administrations' willingness to let Europe leach off of American workers and taxpayers.

In Mexico, the benefits seem limited, despite an increase in jobs outsourced from the United States. And a recent analysis suggests eliminating NAFTA would have only a mild impact on Canada's economy. However, the point of all of this should be to expand trade, not reduce the strengths of the existing pact. That's more an update than a transformation.

A 25 per cent tariff on autos would subtract as much as 1 per cent from Canada's GDP and could prompt a significant decline in the Canadian dollar, Shenfeld said.

That provision is aimed at discouraging firms from locating plants in lower-wage Mexico. Those changes are meant to encourage more auto production in the United States.

Markets nevertheless responded positively to news of the deal. "He has not got any approval to negotiate a bilateral deal with Mexico", Herman said.

"I like to call this deal the United States-Mexico trade agreement", he said.

The first tipoff was the theatrics, which were rushed even by Trump's looser standards.

This question would be easier to answer if the Trump administration were clearer about its goals. Under the deal, 75 per cent of the content of each North American vehicle must come from NAFTA countries in order to qualify for duty-free treatment, up from the current 62.5 per cent.

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