The New York Times cited a senior administration official Wednesday saying that President Donald Trump is preparing an executive order to pull the United States from the North American Free Trade Agreement (NAFTA).
According to the Times report:
It was not clear what the language of the executive order would be, or what steps would come next. But an executive order could start a required six-month notification period for withdrawal, during which time talks on renegotiation could be pursued.
Trump harshly criticized NAFTA throughout the 2016 presidential race, calling it, among other things, “one of the worst things that ever happened.” Trump’s election platform included a pledge to exit from or negotiate the terms of the 1994 agreement between the U.S., Canada, and Mexico.
The last week has seen Trump strongly signal he is ready to begin the process of realigning trade within North America. He told the Associated Press Monday that “I am going to either renegotiate it or I am going to terminate it.” Tuesday, Trump announced a tariff of up to 24% on Canadian lumber imports, according to him in retaliation for our northern neighbor’s treatment of American dairy exports.
NAFTA has been a point of political contention ever since negotiations over its creation began under President George H.W. Bush in 1990, taking center stage in the 1992 presidential election with outsider candidate Ross Perot famously telling voters to listen for a “giant sucking sound” of jobs leaving to Mexico. Should Trump issue an executive order threatening withdrawal from NAFTA, it could represent the most significant reform to the organization since it came into effect 24 years ago. During that time, America’s economy has grown by leaps and bounds, but, as President Trump pointed out in his campaign screeds against NAFTA, the same period has seen a significant erosion of the once dominant American manufacturing sector.