Subscibe to DEAL OF THE DAY


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*-- Trump announces trade deal with Mexico --*

President Donald Trump announced the completion of a new trade agreement between the United States and Mexico on Monday.

Negotiations centered on revisions to portions of the 1994 North American Free Trade Agreement, notably those involving auto manufacturing, which President Donald Trump has criticized for their imbalances. Any agreement between Mexico and the United States must also involve Canada, the other NAFTA signatory, although Trump suggested a deal with Canada could be separate from the U.S.-Mexico agreement. Canada has been absent from the discussions since Trump began criticism of Canadian trade policy. Canadian leaders insist that they are in no hurry to renegotiate the pact or to agree to anything not in their favor.

Trump said the NAFTA name will be discarded, citing a "bad connotation." He called the agreement "a very good deal for both countries," and added that negotiations with Canada will start soon, or additional tariffs on Canadian imports will be applied.

During the brief announcement, he spoke by telephone with Mexican President Enrique Peña Nieto, who offered congratulations on the new pact, adding, "Canada will be incorporated in all this."

Any revisions to NAFTA will also require congressional approval, and some Republican legislators have been critical of Trump's plans to reshape the agreement.

An agreement to revise the pact would give Trump a significant victory in a trade war he started. The United States in May imposed steep tariffs on steel and aluminum from several countries, including Mexico. Mexico retaliated with tariffs on $3 billion of U.S. exports, including pork, apples, potatoes, bourbon and cheese.

Trump has pressed for changes to the rules involving auto manufacturing in an effort to bring more production jobs to the United States. The U.S. plan calls for increased regional content for autos. At least 75 percent of an automobile's value must be made in North America, up from 62.5 percent previously, to qualify for zero tariffs. Use of more local steel, aluminum and auto parts will be required, and a certain proportion of the car must be made by workers earning at least $16 per hour, which would benefit the United States and Canada.

Although the deal will not be finalized immediately, the progress in negotiations comes as a relief to U.S. businesses that find themselves in the middle of trade wars with Mexico, Canada, China and the European Union, The New York Times reported.


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