Trump says he’ll shut down NAFTA if he’s not able to clinch better deals

Important News To Know about Today’s  Market:

• ISM Manufacturing PMI (U.S.) rose to actual 57.2, while forcast was 57.0
• Congress averts U.S. government shutdown
• Global stocks edge up; key European, Asian markets closed
• Oil starts the week lower
• S. data, Mnuchin ahead
• China factory activity slows in April

For more info on these subjects, visit: https://www.investing.com/

Trump about NAFTA

“The United States is preparing to shut down the North American Free Trade Agreement (NAFTA) if renegotiation efforts prove fruitless.”

In an interview with CBS’s “Face the Nation”, Trump was insisting that he was going to terminate the agreement which links the U.S. to Canada and Mexico. Before having a change of heart when the leaders of both countries reached out to him. (CNBC)

“I got a very nice call from Justin Trudeau, the prime minister of Canada,” Trump told CBS. “I was all set to do it. In fact, I was going to do it today. I was going to do it as we’re sitting here.”

Firstly, after conversing with Trudeau and Mexican President Enrique Pena Nieto, Trump said he would negotiate. However, the president added that “if I’m not able to renegotiate NAFTA, I will terminate NAFTA.”

Secondly, Trump signed an executive order Saturday directing the Commerce Department and the U.S. trade representative to conduct a study of U.S. trade agreements. The goal is to determine whether America is being treated fairly by its trading partners and the 164-nation World Trade Organization.

U.S. and Canada

Following, last week Trump lashed out at Canada. Suggesting the country was unfairly disadvantaging U.S. dairy and lumber products. Yet in practice, some economists say, Trump has been less stridently anti-trade as his campaign rhetoric suggested he would be.

“In general, the Trump administration has, up to now at least, taken a much less protectionist line than we feared after the very dark and foreboding inaugural speech, which talked of putting America first and that protection would lead to prosperity,” Capital Economics said in a report.

“However, there is no guarantee that we won’t see a renewed protectionist lurch,” particularly as warring factions close to the president jockey for advantage, the firm added.

February’s Press Conference

Let’s remind ourselves about what happened february the 13th. In a press conference where Mr Donald Trump and Canada’s PM Trudeau were discussing their NAFTA partnership:

…

“We have a very outstanding trade relationship with Canada. We’ll be tweaking it. Also, we’ll be doing certain things that are going to benefit both of our countries. It’s a much less severe situation than what’s taken place on the southern border.” Trump said at a joint White House press conference with Trudeau.

Trump has called for a renegotiation of NAFTA, the deal implemented in 1994 that helped to make Canada and Mexico two of America’s crucial trading partners, saying it has harmed American workers. After his meeting with Trump, Trudeau stressed the magnitude of the U.S. and Canada economic relationship. Saying the countries “ventured into groundbreaking economic partnerships that have created good jobs for both of their people.” (source: CNBC)

…

In conclusion, the idea of U.S. administration is clear. They would like it better if Mexico’s out. But there are certain factors that show good and bad parts of every possible outcome. Certainly, Mr Trump’s announcement that he would shut down NAFTA should be considered wisely…