The Canadian dollar fell in the wake of the news.
There are growing concerns within the Canadian government that U.S. President Donald Trump will announce the end of NAFTA in late January.
As noted by Reuters, “The sources said they expected Trump would make his move at about the same time that negotiators from the United States, Canada and Mexico meet in late January for the sixth and penultimate round of talks to modernize the treaty.”
Additionally, “The Canadian dollar fell to its weakest level this year at C$1.2561 to the greenback, or 79.61 U.S. cents. The peso was trading down more than 0.6 pct at 1925 GMT, while the S&P/BM IPC stock index .MXX was down about 1.7 percent.”
It’s important to point out that the U.S. Congress would likely be able to stop Trump from scrapping NAFTA, and many feel that he may use the idea of the ‘end’ of NAFTA as a negotiating tactic.
This news comes as Opposition Leader Andrew Scheer visited Washington D.C. as part of a “United Front” representing Canada.
It was a pleasure to meet with @USAmbCanada in Ottawa today, ahead of my trip to Washington, D.C. next week. We are doing our part to put up a united Canadian front against U.S. protectionist policies and fight for the thousands of jobs that depend on NAFTA. pic.twitter.com/lKkLAi4Cnf
— Andrew Scheer (@AndrewScheer) January 9, 2018
Both the Conservatives and Liberals have called for NAFTA to continue, and there is concern about the impact on Canada’s economy if the deal was scrapped.
With that in mind, there is a clear possibility that – even if NAFTA ended – Canada and the U.S. would go back to the previous FTA that existed before Mexico (with their cheap labour that undermines Canadian manufacturing), was added.
Photo – YouTube