One of the core issues of President Donald Trump’s 2016 campaign was that the United States was getting royally screwed in a whole host of trade deals (or “raped,” as he said in the case of China). He skewered the Trans-Pacific Partnership (negotiated under President Obama but never signed, and then nixed by Trump). He took potshots at the World Trade Organization (and has now signaled he may ignore WTO rulings). On several occasions, he floated the idea of a major tariff on imports. And, perhaps most famously, he called NAFTA (the U.S. trade partnership with Canada and Mexico) “the worst trade deal ever” and signaled that it might get the axe in a Trump administration.
In recent weeks, though, as his 100th day in office approaches and the Trump administration moves to check major campaign promises off its list, President Trump has vacillated between saying he’ll terminate the 24-year-old deal and saying he’ll renegotiate.
On Wednesday, President Trump told Mexican president Enrique Peña Nieto and Canadian Prime Minister Justin Trudeau that the U.S. wasn’t planning to immediately bail from NAFTA. As reporting from The New York Times points out, aides close to Trump were saying just hours before the call that the 45th President was likely to “sign a directive starting a six-month clock to end the trade agreement.”
A principle reason for this desire to renegotiate is that President Trump believes that NAFTA has decimated jobs. And it is true that certain U.S. jobs have crossed the border since NAFTA was created.
Fortune pointed out in September, however, that it’s difficult to track how many of those jobs were going to go south regardless. Moreover, in 2016 the U.S. sold some $214 billion in goods to Mexico (which helps to create new jobs here).
That piece also argues that the U.S. buying goods from Mexico helps to maintain low prices and keep overall inflation in check. Such low costs could be affected by a renegotiation and would be affected by a termination.
This morning, President Trump continued to try to have his cake and eat it too by saying that the chat with Peña Nieto and Trudeau was productive and that the U.S. would renegotiate, rather than terminate.
I received calls from the President of Mexico and the Prime Minister of Canada asking to renegotiate NAFTA rather than terminate. I agreed..
— Donald J. Trump (@realDonaldTrump) April 27, 2017
But then, nine minutes later, he finished that thought by affirming that the U.S. would still pull out of NAFTA if the new deal wasn’t a fair deal.
…subject to the fact that if we do not reach a fair deal for all, we will then terminate NAFTA. Relationships are good-deal very possible!
— Donald J. Trump (@realDonaldTrump) April 27, 2017
While President Trump has treaded softly with the NAFTA issue, the past few weeks have seen him be more forceful with individual U.S. trade partners. On Monday, the administration declared it would place on a tariff on Canadian softwood lumber to punish our northern neighbor for allegedly screwing over American dairy farmers. And Trump recently signed an executive order that was aimed at “establishing enhanced collection and enforcement of antidumping and countervailing duties and violations of trade and customs laws,” which (along with EO 21) is aimed at correcting what President Trump believes is a massive trade imbalance with China.