Trump May Have Doomed NAFTA
U.S. President Donald Trump's declaration of broad tariffs on imported steel and aluminum complicates North American trade talks and threatens to doom them altogether.
Negotiators have been meeting in Mexico this week in the seventh round of talks aimed at revamping and modernizing the 24-year old North American Free Trade Agreement. On Monday, trade representatives from the three countries are expected to comment on their progress.
But now NAFTA is caught in the middle of a what could rapidly become an ugly global counter-battle against U.S. trade actions. The European Union has already slapped tariffs on American jeans, bourbon and motorcycles, and other countries have said they could retaliate.
Goldman Sachs economists said the tariffs could trigger more disruptive trade reactions, including possibly stalling NAFTA negotiations and possible restrictions on Chinese trade and investment.
China is said to be the target of the tariffs, but Canada is the biggest exporter of both steel and aluminum to the U.S., and Mexico is a major steel exporter. China does not show up at the top of the list of exporters.
Canadian officials said they could retaliate, and took issue with Trump using national security as a reason for the tariffs. Prime Minister Justin Trudeau Friday called the tariffs unacceptable and said they would be disruptive to markets on both sides of the border.