TCR Brief: Here’s What Happens If Trump Torpedoes NAFTA

And is he planning to repeal and replace it?

Not a lot of people mention this: Even though Trump accuses Bill Clinton of negotiating a bad trade deal with our neighbors, a North American free- trade agreement was actually Ronald Reagan’s idea.

Anyway, all of us at The Chaos Report have covered business news for decades. Here’s a quick version of what happens if NAFTA falls apart:

• Canada ramps up unilateral deals with the EU.

• China becomes Mexico’s biggest trading partner.

• U.S. agriculture is devastated. As are manufacturers of big-ticket items like cars.

“I think we’ll end up probably terminating NAFTA,” Trump said in his speech in Arizona Tuesday. (You can watch the video:)

But then he immediately follows with something curious, and seemingly contradictory: “I don’t think you can make a deal without a termination.” So wait. Is this a window into Trump’s bargaining strategy? Or just him bloviating?

The U.S., Canada, and Mexico just concluded a round of talks on the North American Free Trade Agreement (as we reported Monday). Even if the preliminary meetings didn’t produce any huge breakthroughs, negotiators agreed to an extremely aggressive schedule for further talks, which will start in about a week. That’s something to be at least a little excited about if you’re a trade negotiator, or a farmer, or a car maker, or an assembly line worker.

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