President Donald Trump on Monday announced that his administration and the Mexican government have reached a preliminary trade agreement between the United States and Mexico that would replace the countriesโ trade relationship under North American Free Trade Agreement (NAFTA).
โItโs a big day for trade, a big day for our country,โ he said.

NAFTA, a trade agreement between Canada, Mexico and the Unites States came into force on Jan. 1, 1994. Supporters of NAFTA said it would eliminate trade barriers between the countries and boost their economies. Critics of NAFTA, including Trump, said it hurt the U.S. economy because it made it easier for manufacturers to move their operations to Mexico to take advantage of lower labor costs and then sell their products back into the United States.
No details of the new deal were released today and any new trade deal would require the approval of Congress.
Trump said the new deal with Mexico would create more reciprocal trade between the two countries.
โThey used to call it NAFTA,โ Trump said. โWeโre going to call it the United States-Mexico Trade Agreement, and weโll get rid of the name NAFTA. It has a bad connotation because the United States was hurt very badly by NAFTA for many years. And now itโs a really good deal for both countries, and we look very much forward to it.โ
Trump spoke to Mexican President Enrique Pena Nieto about the deal in a phone call today in front of reporters in the Oval Office.
โI think this is something very positive for the United States and Mexico,โ Pena Nieto said. โThe first reason for this call, Mr. President, is, first of all, to celebrate the understanding we have had between both negotiating peace on NAFTA, in the interest we have had for quite a few months now to renew it, to modernize it, to update it, and to generate a framework that will boost and potentiate productivity in North America.โ
โThis is something thatโs very special for our manufacturers and for our farmers from both countries, for all of the people that work for jobs,โ Trump said. โItโs also great trade and it makes it a much more fair bill. And we are very, very excited about it.โ
Trump said he wants to also negotiate a new trade agreement with Canada.
โAs far Canada is concerned, we havenโt started with Canada yet. We wanted to do Mexico and see if that was possible to do,โ he said. โCanada will start negotiations shortly. Iโll be calling the Prime Minister very soon. And weโll start negotiation, and if theyโd like to negotiate fairly, weโll do that. You know, they have tariffs of almost 300 percent on some of our dairy products, and we canโt have that. Weโre not going to stand for that. I think with Canada, frankly, the easiest thing we can do is to tariff their cars coming in. Itโs a tremendous amount of money and itโs a very simple negotiation. It could end in one day and we take in a lot of money the following day. But I think weโll give them a chance to probably have a separate deal. We can have a separate deal or we can put it into this deal.โ
Trump said he also plans work out trade deals with other countries, including China. Trump has placed tariffs on billions of dollars of Chinese goods and China has responded with retaliatory tariffs.
โWeโre working very much with other countries,โ he said. โChina is one; they want to talk. And itโs just not the right time to talk right now, to be honest, with China. Itโs been โ itโs too one-sided for too many years, for too many decades. And so itโs not the right time to talk. But eventually, Iโm sure, that weโll be able to work out a deal with China. In the meantime, weโre doing very well with China.โ