4 takeaways from the U.S.-Mexico trade deal

Evan Vucci  AP

The United States and Mexico have reached an historic trade deal revising the North American Free Trade agreement. He's threatening anew to slap tariffs on Canadian cars if they fail to do what he wants.

The costs for the United States would also be high, as America's auto sector uses parts that are manufactured in Canada. The Trump White House will have to start trying to build support in Congress for its bilateral approach.

Trump praised the deal at the White House on Monday, saying the new agreement would be "tremendous" for USA farmers and workers. "It was a deal that was a terrible deal for our country", he said. He nixed the Trans Pacific Partnership free-trade deal negotiated by the Obama administration upon taking office. Trump did just that last summer, proposing to modernize NAFTA-not lop off Canada.

"We could have a separate deal (with Canada) or we could put it into this deal", Trump said.

The pact also requires greater use of United States and Mexican steel, aluminum, glass and plastics.

But the president hinted that all might not be smooth sailing from here, suggesting he could cut Ottawa out of the deal reached with Mexico and adding that he wanted to change the agreement's name.

"NAFTA was a tri-party agreement only made operative with legislation enacted by Congress", said Toomey, a member of the committee that oversees trade policy.

The pair came to an agreement on Monday after months of intense negotiations to overhaul their free trade pact, which also involves Canada.

The looming deadline was precipitated by a political changing of the guard in Mexico, and mid-term elections in the US.

The president invited a host of reporters into the Oval Office to watch him call his Mexican counterpart, President Enrique Pena Nieto.

A deal with Canada that resolves the 25 percent import tax on steel imposed by President Donald Trump's administration would be a relief for developers working in the US, who have seen construction costs rise because of the tariff.

But Trump was eager to portray the agreement as much more than that as the reality TV star-turned-president orchestrated the latest made-for-TV moment of his presidency. "I will terminate the existing deal", Trump replied.

"We'll get rid of the name NAFTA, it has a bad connotation because the United States was hurt very badly by NAFTA for many years", Trump said.

US business groups are encouraged by progress on a replacement for Nafta but have concerns about provisions such as weakening protections for investors and don't want to see separate deals with Mexico and Canada.

"I think with Canada, frankly, the easiest we can do is to tariff their cars coming in".

Prime Minister Justin Trudeau says he has been encouraged by what he calls the progress made by Canada's NAFTA partners, especially on automobiles.

Regardless of the roiling debate about USA trade law and negotiating tactics, Trump's imperiously dismissive tone about Canada today leaves little doubt the Washington-Ottawa relationship is badly frayed.

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