Trump Warns Canada and Mexico About NAFTA Renegotiation and Tariffs

Donald Trump stepped up his threats to impose tariffs on Monday, declaring that Canada and Mexico will be affected by his planned import tariffs on steel and aluminium unless they agree to renegotiate their trade agreements.

In a pair of tweets, the president reiterated his displeasure with trade deficits with Mexico and Canada, two of the US’s largest trading partners. Metals duties will only be removed on America’s neighbours to the north and south, he said, after a “new and fair” free trade agreement is signed.

usdcad Canadian dollar graph, March 5, 2018

Trump followed up with another tweet proclaiming: “To protect our Country we must protect American Steel! #AMERICA FIRST.”

Trump has long attacked the North American Free Trade Agreement, or Nafta. The latest round of a nearly year-long renegotiation effort is concluding this week in Mexico City.

Trump also called on Canada to “treat our farmers much better” and Mexico to do “much more” on stopping the flow of illegal drugs into the US.

The White House trade adviser, Peter Navarro, earlier rejected criticism of the planned tariffs amid concerns they may kick off a trade war, telling Fox and Friends: “There are virtually no costs here…

“If you put a 10% tariff on aluminum, it’s a cent and a half on a six pack of beer and it’s $25,000 on a $330m [Boeing 777],” Navarro said.

via The Guardian

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza