President Donald Trump was prepared to end the North American Free Trade Agreement deal, which had governed trade relations for the past 23 years, with a dramatic announcement Saturday at a Pennsylvania political rally marking his 100th day in office.
As rumors spread of the possible action, Mexican President Enrique Peña Nieto called the president urging him not to pull out of the accord. “Let me think about it,” Mr. Trump said. Within a half hour a call came in from Canadian Prime Minister Justin Trudeau with a similar request.
After the talks, Mr. Trump was convinced “they’re serious about it and I will negotiate rather than terminate,” the president said in an interview with The Wall Street Journal on Thursday.
Meanwhile, Sonny Perdue—the agriculture secretary who took office two days earlier—and Commerce Secretary Wilbur Ross met with Mr. Trump and showed him a map indicating the states where jobs would be lost if the pact collapsed, according to a person familiar with the matter. Many were farm and border states that voted heavily for Mr. Trump.
Those conversations, along with a flood of calls to the White House from business executives, helped steer Mr. Trump away from an idea that some of his own advisers feared was a rash and unnecessary threat to two trading partners who fully expected to renegotiate the agreement anyway.
But Mr. Trump wanted to show dramatic action on key campaign promises before he hits his 100 days in office on Saturday, and the threat would have showed his supporters that he was willing to take steps opposed by the establishment to upend American trade policy.
Mr. Trump insists the talks will take place amicably among allies he likes and respects—though he also reminded them that he was willing to entertain an extreme option in service of rewriting American trade policy, and insisted that he could put the option back on the table if the coming talks don’t proceed the way he would like.
At the same time, the gyrations risked weakening the U.S. position—by unifying Canada and Mexico in their strategies to counter the U.S., irking key lawmakers he needs to back him, and exposing his inability to overcome the strong domestic support for Nafta that he has helped rally.
“I expect the administration to closely consult with Congress before such major trade-policy decisions are made,” said Utah Republican Sen. Orrin Hatch, chairman of the Senate Finance Committee, which oversees trade, archly reminding him of the need to take the time to work with Capitol Hill. “Withdrawing from Nafta would have significant effects on the America economy.”
“It was a trial balloon, but it didn’t work,” said Mexican economist Luis de la Calle, a trade expert who had been a senior negotiator on the pact. “Next time, nobody will believe it. People start to figure things out.”
But Mr. Trump said in the interview that he still holds his strongest card. “We’ll terminate Nafta if we’re unable to make a deal, but hopefully we won’t have to do that.” full story