The 16-year trade deal between the U.S. and Mexico announced by the Trump administration earlier this week sets into motion a series of events that could ultimately lead to an overhaul of the North American Free Trade Agreement (NAFTA), which has been in force between the U.S., Mexico, and Canada since 1994.
For more on this, see highlights of my report below, followed by a link to the full U.S. Outlook, delivered on August 31.Key observations:
- Although the deal has yet to be finalized, it includes no resolution on the issue of eliminating the U.S. import tariffs of aluminum and steel from Mexico and Canada.
- Autos were one of the main sticking points holding up the negotiations.
- While auto exports to the U.S. are not as important to Canada as they are to Mexico, they were the second biggest goods export to the U.S. in 2017, trailing only mineral fuels.
- In the short run, the revised trade agreement between Mexico and the United States is not expected to have substantive impacts on the U.S. economy.
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