President Donald Trump said he's agreed to requests from Canada and Mexico not to terminate the United States' involvement in the North American Free Trade Agreement and would renegotiate instead. But withdrawal isn't completely off the table either, he said.
Officials in the Trump administration said April 26 that Trump was considering signing a directive to pull the United States out of the free trade agreement, the Associated Press reported.
On April 27 via Twitter, Trump said:
"I received calls from the President of Mexico and the Prime Minister of Canada asking to renegotiate NAFTA rather than terminate. I agreed..
...subject to the fact that if we do not reach a fair deal for all, we will then terminate NAFTA. Relationships are good-deal very possible!"
Late on April 26, Trump, Mexican President Enrique Peña Nieto and Canadian Prime Minister Justin Trudeau spoke on the phone, and Trump "agreed not to terminate NAFTA at this time," said a White House readout of the call.
The three leaders will start procedures to renegotiate the trade deal, according to the White House.
Trump had previously said that the United States had "a very outstanding trade relationship with Canada." He changed his tone later saying that in Canada "some very unfair things have happened to our dairy farmers and others." Recently, the Trump administration announced new tariffs on imports of Canadian softwood lumber.
Trump during the campaign also said that if he didn't get the deal he wanted, he would terminate U.S. involvement.
Trump may be eager to start negotiations ahead of Mexico's July 2018 presidential election, trade experts told us.
"The more you get into the heart of the Mexican election season, the harder it will be for Peña Nieto to make concessions," said Edward Alden, a senior fellow at the Council on Foreign Relations.
Should Trump choose to withdraw from NAFTA, he may face political pushback, particularly from states like Texas, whose economy depends on the agreement, Alden said.
"There's no question NAFTA can definitely use an updating, it's been around for quite a while, and certain aspects of trade and services are not covered," said Marina v.N. Whitman, a professor of business administration and public policy at the University of Michigan
But undoing NAFTA, if the Trump administration chose that path, could cut profit margins for some businesses and impact prices of goods for consumers, she said.
Trump has reaffirmed his plan to renegotiate NAFTA, but isn't fully backing away from terminating the deal. For now, we continue to rate this promise In the Works.