White House: Trump says US will not withdraw from NAFTA

"President Trump agreed not to terminate NAFTA at this time and the leaders agreed to proceed swiftly, according to their required internal procedures, to enable the renegotiation of the NAFTA deal to the benefit of all three countries", the White House said in a statement late Wednesday.

The White House made the surprise announcement on Wednesday in a read-out of calls between the world leaders.

The White House says the president "agreed not to terminate NAFTA at this time".

Trump has blamed NAFTA for American job losses, but says he believes the end result "will make all three countries stronger and better".

Trump railed against the decades-old trade deal during his campaign, describing it as a "disaster". White House officials told CBS News the order was being drafted by Peter Navarro, director of the National Trade Council, with help from chief strategist Steve Bannon, the economic nationalists among Mr. Trump's staff.

Just one USA smelter makes high-purity aluminum, producing enough for peacetime military needs but not enough if the country enters into conflicts, he said.

But those same reports say Trump hasn't decided yet.

Trump criticized Mexico extensively during his presidential campaign.

Analysts warned that US exporters could face high tariffs without NAFTA, because the USA exporters not only have gained greater tariff preferences under the deal, but also have been exempt from potential tariff hikes facing other exporters. And in the midst of all that, US lawmakers will be embroiled in their own midterm elections, complicating the task of trade-related tradeoffs.

But Commerce Secretary Wilbur Ross insisted Wednesday evening that talk of any executive order were "rumors".

The AP reports that both the Mexican and Canadian governments confirmed the conversations had taken place.

By affirming his intention to reopen the agreement with Trudeau and Peña Nieto, Trump is able to fulfill a 100-day pledge to "announce my intention to renegotiate NAFTA". NAFTA expanded trade between the U.S., Canada and Mexico, eliminating tariffs on most goods traded among the three countries.

And the Commerce Department said Monday that it would begin charging a tariff on the import of softwood lumber from Canada into the United States, alleging Canada was improperly subsidizing its domestic timber firms.

"As a tactic, it's definitely hardball, and probably not the way to deal with a counterparty that is both a longtime trading partner and critical to so many security, immigration and counterterrorism initiatives", Garza said. But the announcement offers less populist punch than withdrawing from the agreement outright, a move that could cause major disruptions to the economies in Canada, the USA, and Mexico. In Wisconsin last week, Trump called Canada's dairy pricing scheme "another typical one-sided deal against the U.S".

"To totally abandon that agreement means that those gains are lost", said Paul Ferley, an economist at Royal Bank of Canada.

  • Leroy Wright