WASHINGTON--President Donald Trump told Reuters on Thursday that he was "psyched" to terminate the NAFTA trade deal with Canada and Mexico, but changed his mind after their leaders asked for it to be renegotiated instead.
Trump said in an interview with Reuters that he will not hesitate to change course again and pull the plug on the North American Free Trade Agreement if the negotiations become "unserious."
His comments came at the end of a long 24 hours during which Ottawa and Mexico City were whipsawed over the Trump administration's intentions over the 23-year-old trade pact. "You know I was really ready and psyched to terminate NAFTA," Trump said.
He decided that it would be better to terminate the trade deal after hearing about Wisconsin farmers' struggles with new Canadian dairy rules that were shutting out their milk protein exports. "You saw that, you wrote about it," Trump said. "And I said I’ve had it. I’ve had it."
But after administration officials said a withdrawal order was being prepared, Trump said he received phone calls from Mexican Presdent Enrique Pena Nieto and Canadian Prime Minister Justin Trudeau asking to renegotiate the pact. "I’m not looking to hurt Canada and I’m not looking to hurt Mexico. They’re two countries I really like," Trump said. "So they asked to renegotiate, and I said yes."
News of the possible U.S. pullout from NAFTA rattled financial markets on Wednesday. Relative calm returned on Thursday after Trump's comments, and the Mexican peso strengthened 0.86 percent against the U.S. dollar, while the Canadian dollar was flat versus the greenback.
Mexico, Canada and the United States form one of the world's biggest trading blocs, and trade disruptions among them could adversely affect farm, automotive, energy and other sectors in all three countries. NAFTA removed most trade and tariff barriers between the neighbors, but Trump and other critics have blamed it for deep U.S. job cuts.
Trump campaigned for president last year on a pledge to pull out of NAFTA if he could not renegotiate better terms. The United States went from running a small goods trade surplus with Mexico in the early 1990s to a $63-billion deficit in 2016.
Asked by Reuters what would make NAFTA a fair deal, Trump said: "Open markets. Open borders for trade" and "Fairness, no government subsidies so that it makes it impossible for our people to compete."
He added that if the NAFTA negotiations "become unserious, I will terminate."
As Trump spoke, a new trade irritant between the United States and Canada emerged, as Boeing Co asked the U.S. Commerce Department to investigate alleged price dumping and unfair Canadian government subsidies for Bombardier Inc's new Canadian-made CSeries jetliners.
