Trump late on Friday tweeted that a “deal with Mexico is coming along nicely. Autoworkers and farmers must be taken care of or there will be no deal,” adding that Mexican president-elect Andres Manuel Lopez Obrador “has been an absolute gentleman.”
Deal with Mexico is coming along nicely. Autoworkers and farmers must be taken care of or there will be no deal. New President of Mexico has been an absolute gentleman. Canada must wait. Their Tariffs and Trade Barriers are far too high. Will tax cars if we can’t make a deal!
— Donald J. Trump (@realDonaldTrump) August 10, 2018
Trump also singled out Ottawa in his tweet, saying: “Their Tariffs and Trade Barriers are far too high. Will tax cars if we can’t make a deal,” reports the Toronto Star.
A spokesperson for Canada’s Foreign Affairs Minister Chrystia Freeland said Ottawa is not changing its course, despite Trump’s tweets. “Our focus is unchanged,” Adam Austen wrote in an email. “We’ll keep standing up for Canadian interests as we work toward a modernized trilateral NAFTA agreement.”
Of course, the trade talks are only bilateral at this time because Canada is not included in the talks between the U.S. and Mexico. The talks are expected to go into next week. It seems that new sticking points have emerged over Trump’s threat to impose steep automotive tariffs.
However, as the summer drags on, Canada has not been back to the negotiations table, and this is not good for Canada. Some observers are concerned that Canada will end up being forced to accept a deal set up with just the two parties, essentially leaving Canada to either accept the agreement or back away.
Canadian officials are saying they have been involved in the negotiations, arguing there have been lots of bilateral talks between NAFTA partners during the yearlong renegotiation process. But after Friday’s tweet from Trump praising the Mexican president, it does leave a particularly bad taste in the mouth as to what is really going on.
A source familiar with the Ottawa NAFTA negotiations said on Friday that Ottawa’s negotiators won’t return to the table in Washington until the U.S. and Mexico find common ground on their outstanding issues, which right now center on the Trump administration’s ability to impose national security tariffs on future Mexican production from new auto assembly and parts plants.
Officials have essentially agreed that a new NAFTA trade deal would exempt existing Mexican auto plants from any “Section 232” tariffs. However, the U.S. wants to keep the threat of 25 percent tariffs that would discourage new automotive investment in Mexico to serve the U.S. market.
The U.S. and Mexico still have other issues to work out, including what percentage of auto industry components need to be made in North America to avoid tariffs, and how many cars and trucks need to be made in factories paying higher wages. But keep one thing in mind – The U.S. has not given any concessions to Mexico – Instead, the U.S. is looking for even further concessions from Mexico as the August deadline for the talks approaches. So the threats keep coming.
