WASHINGTON — President Donald Trump today reverted to a campaign promise to renegotiate the North American Free Trade Agreement (NAFTA) or get rid of it after weeks of his administration seeming to take a less-outwardly aggressive approach to the longstanding trade deal.
"NAFTA has been very, very bad," Trump said in a speech at a tool maker in Kenosha, Wis., referencing reports that Wisconsin dairy farmers are being hurt by recent Canadian price changes that the farmers say violate trade standards. "The fact is that NAFTA has been a disaster for the United States and a complete and total disaster.
"We're going to make some very big changes or we're going to get rid of NAFTA once and for all."
While that rhetoric aligns with that used by Trump on the campaign trail in Michigan and across the Upper Midwest where NAFTA is blamed for job losses and factories moving to Mexico to take advantage of lower-wage workers, it is somewhat at odds with his administration's more recent statements.
Last month, the Wall Street Journal reported that a draft proposal being circulated by the Trump administration in Congress was seeking "mostly modest" changes to NAFTA. When asked about it then, White House Press Secretary Sean Spicer said the proposal was not "an accurate assessment of where we are at this time," but offered no explanation other than to say more would come after Trump's U.S. trade representative is confirmed by the Senate.
If the Trump administration moves to rewrite or rip up NAFTA — through which trade among the U.S., Canada and Mexico has been largely tariff-free since the 1990s — it could have a vast impact on Michigan's dominant automakers, even though there have been several announcements recently about job expansions in the U.S.
Since NAFTA was put in place, automakers have built up a large number of operations and a supplier network in Mexico and lower-wage workers there have been key in allowing American car companies to make a profit off smaller-car production. While Trump has said NAFTA must be renegotiated to bring jobs lost back to the U.S. and prevent more from leaving, economists also worry higher tariffs or a trade war could lead to higher prices and hurt business.
Trump has called on administration officials to study trade agreements the U.S. maintains around the world to determine how best to improve the nation's trade imbalance — a move that could inform any possible changes to NAFTA.
But today he also complained that rules regarding a renegotiation of NAFTA have stopped or otherwise slowed his administration from moving forward, calling them "ridiculous."
Under NAFTA's rules, the administration must notify Congress 90 days before reopening the agreement for negotiation but no such formal notice has been sent.