WASHINGTON — President Trump hailed a revised North American Free Trade Agreement as a victory for the United States, Canada, and Mexico on Monday, saying his get-tough approach to trade, including his use of tariffs, was bringing results.
Trump portrayed the new agreement as the fulfillment of a campaign promise to terminate NAFTA, saying he had made good on his plan to rip up “the worst trade deal ever made” and help American businesses and workers.
The president attributed the breakthrough with Canada and Mexico to his use of tariffs and suggested that would continue to be part of his playbook as he tries to force concessions from other trading partners.
The updated NAFTA, which will be called the United States-Mexico-Canada-Agreement or USMCA, represents Trump’s biggest trade achievement to date and comes after more than a year of intense negotiations with Canada and Mexico.
But while the United States resolved its North American trade differences, it is still embroiled in disputes with China and the European Union and it is unclear whether Trump’s pugilistic approach will work with those trading partners. Robert Lighthizer, Trump’s top trade negotiator, said that the agreement reached Sunday night would be a template for future deals, suggesting tariffs will remain part of Trump’s repertoire.
The agreement came together Sunday night after a weekend of frenzied negotiations between Canada and the United States, which culminated in keeping the three-country pact intact.
The agreement is largely a refresh of a 25-year-old pact that has brought together the economies of Canada, Mexico, and the United States but had become somewhat outdated in the digital age. It makes a series of changes to areas like intellectual property and the digital economy, including protections for patents and domain names.
As part of the deal, Canada will ease protections on its dairy market and provide access that is greater than what the United States would have gained through the Trans-Pacific Partnership, a trade treaty that Trump withdrew from last year.
The United States also relented on its demands to end an independent tariff dispute settlement system Canada has said is a red line in negotiations. Keeping that was a major concession for the United States and a change for what was agreed with Mexico.
The agreement builds upon the deal that was reached with Mexico in August. Most importantly it made alterations to rules governing automobile manufacturing, in an effort to bring more car production back to the United States from Mexico. As part of the agreement, a significant portion of vehicles would have to be made by workers earning at least $16 an hour. The wage floor is intended to boost jobs in the United States and Canada, where wages are already higher than Mexico. Analysts said the agreement might have an incremental impact on US automotive jobs and may push car prices slightly higher.
But as lawmakers, trade analysts, and industry groups studied the new text, some suggested that it was too soon to celebrate.
The United Steelworkers union urged caution Monday, lamenting that the Trump administration’s steel and aluminum tariffs had not been lifted as part of the deal. Mexico and Canada say they expect those tariffs to be worked out on a separate track. Also unresolved is whether Canada and Mexico will continue to impose the retaliatory tariffs they placed on American products like whiskey, orange juice, and chocolate.
“The key question now is whether this new agreement, when final, will make a measurable difference in workers’ lives and whether workers will have confidence in the new provisions and the commitment of government to enforce those provisions,” said Leo W. Gerard, president of the union.