Amid reports of US NAFTA pullout, Mexico leaned on diplomacy

President Donald Trump said yesterday he pulled back from the brink of killing the 23-year-old trade pact with Canada and Mexico after requests from their leaders and expressed optimism about winning better us terms in a renegotiated deal.

It seemed that the Trump administration was planning to end the North American Free Trade Agreement on Wednesday, after his aides sent word that they'd prepared such an executive order. Following the outcry, President Trump said in a statement: "It is my privilege to bring NAFTA up to date through renegotiation".

It started last week when Trump went after the Canadian dairy producers.

"They asked me to renegotiate - I will".

Trump has promised to build a wall along the U.S. -Mexico border and threatened a tax on Mexican goods when they enter the United States.

"We have to make a deal that's fair for the US". Charles Schumer, the Democratic minority leader whose cooperation Mr. Trump will need in getting a new NAFTA through Congress.

The president's shifting position on the trade deal - which he has called the "worst ever" - raises related questions about what he can actually do unilaterally, to exit NAFTA or to materially change its terms.

To recap: President Donald Trump has slapped an overall 20% tariff on Canadian softwood lumber, has gone on the offensive about Canada's dairy industry and spent a good 24 hours on a will-he-or-won't-he-cancel-Nafta roller coaster.

"I respect their countries very much".

"Meanwhile, Trump wrote on his Twitter account the following day, "[After the negotiation] if we do not reach a fair deal for all, we will then terminate NAFTA".

But, he added, "we're going to give renegotiation a good, strong shot". Japan is the top market for USA potatoes. It is estimated that millions of depend on NAFTA related trade between Canada and the USA, which gives some hope as to the ultimate outcome of a renegotiation of the trade deal with Canada. In order to renegotiate the trade deal, Trump must notify Congress.

Since being signed into law by Bill Clinton in 1993, the North American Free Trade Agreement has been a political whipping boy for various interests. On Thursday, several news outlets ran lengthy reports that dissect why the Trump administration made a decision to rattle the markets and cause panic among business leaders and officials in Canada and Mexico. Canada and Mexico are among their biggest customers. They also see it as an opportunity to make the deal more of a trade agreement, eliminating numerous sidebar issues negotiators insisted on including, such as environmental mandates or labor regulations. One pricing program, the National Ingredients Strategy, provides incentives for Canadian dairy processors that steer them away from purchasing USA products. Bannon already is seen as being on the outs with Trump over reportedly sparring with Trump's son-in-law Jared Kushner.

The NAFTA phone calls are far from an isolated incident when it comes to just how much power Trump invests in relationships with people.

The United States buys about 69 percent of Canada's lumber exports.

But the jobs impact wouldn't only be felt in factories and farms. Agriculture Secretary Sonny Perdue told Trump that terminating NAFTA could hurt some areas of the country that rely on the agriculture and manufacturing industries - areas that supported Trump, per the Washington Post.

The peso recovered to 19.03 to the dollar Thursday, after the governments issued parallel statements committing to renegotiating NAFTA.

In reality, congressional oversight committees could accept notice from someone else, but Democrats on the committees are insisting that Lighthizer be confirmed before they will meet with the administration on trade issues.