The President told the leaders Wednesday he was not immediately planning to end the North American Free Trade Agreement, a pact which he railed against as a candidate and as recently as last week declared was harmful to US workers.
“I decided rather than terminating NAFTA, which would be a pretty big, you know, shock to the system, we will renegotiate,” he told reporters before a meeting with the Argentinian President.
Trump left himself some wiggle room on the trade deal, though, saying that if he is “unable to make a fair deal” he will “terminate NAFTA.”
“We’re going to give renegotiation a good, strong shot,” Trump said.
As he approaches his 100th day in office, Trump and his advisers are hurriedly working to check off promises made during the campaign, one of which was to renegotiate or withdraw from NAFTA. Trump has already removed the US from another massive trade pact, the Trans Pacific Partnership, which was negotiated under President Barack Obama.
Trump’s decision to remain in NAFTA came the same day a senior administration official revealed the White House was considering an executive order to withdraw from the trade accord.
In a description of Trump’s phone calls to Prime Minister Justin Trudeau and President Enrique Peña Nieto, the White House said 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 the phone conversations were “pleasant and productive.”
“It is my privilege to bring NAFTA up to date through renegotiation,” Trump said in a written statement that accompanied the readout of his phone calls. “It is an honor to deal with both President Peña Nieto and Prime Minister Trudeau, and I believe that the end result will make all three countries stronger and better.”
Trump reiterated those points Thursday morning, tweeting, “if we do not reach a fair deal for all, we will then terminate NAFTA.” He also claimed that the two leaders reached out to him.
During his run for office last year, Trump made his disdain for NAFTA a central component of a populist message designed to engender support among working class Americans. He consistently cast the agreement — which was negotiated by President Bill Clinton, the husband of Trump’s presidential opponent Hillary Clinton — as a raw deal for the middle class.
His approach has not softened since taking office, though some of his advisers have warned of grave economic consequences that could accompany withdrawing from the trade deal.
Last week, Trump derided NAFTA during remarks in Wisconsin meant to highlight American manufacturing.
“It’s been very, very bad for our companies and for our workers, and we’re going to make some very big changes, or we are going to get rid of NAFTA once and for all,” Trump said.
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.” 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 US, and Mexico.
Upon news earlier Wednesday that the Trump administration was considering a withdrawal from the agreement, some Republicans urged caution.
“Scrapping NAFTA would be a disastrously bad idea. It would hurt American families at the checkout, and it would cripple American producers in the field and the office,” said Sen. Ben Sasse, a Nebraska Republican, in a statement. “Yes, there are places where our agreements could be modernized but here’s the bottom line: trade lowers prices for American consumers and it expands markets for American goods. Risking trade wars is reckless, not wise.”
And Sen. John McCain on Wednesday urged Trump not to pull the US from NAFTA.
“It will devastate the economy in my state,” McCain said. “I hope he doesn’t do that.”
Nonpartisan congressional research found in 2015 that NAFTA isn’t responsible for an exodus of jobs south of the border, nor for a big jobs boom in the US. Researchers concluded the deal has had a minor impact on the US economy.
Still, about 14 million US jobs depend on trade with Mexico and Canada, according to the US Chamber of Commerce.