Even before the beginning of the crucial negotiations with Canada on 5 September, president Trump began threatening Canada during the weekend. "If we don't make a fair deal for the USA after decades of abuse, Canada will be out", Trump said on Twitter on Saturday.
On a separate footing, the U.S. is now considering imposing new tariffs on $200 billion of imports from China on 7 September, following the conclusion of its public hearings with the American companies on China's theft of intellectual property and forced transfer of technology. "Canada, of course, will only sign a deal which is good for Canada".
"Congress' refusal to ratify a deal without Canada in it weakens Trump's hand, so to achieve his ends, he's attempting to bully not only Canada, but the U.S. Congress as well", he wrote in an email. But the limits of Trump's leverage were also becoming clear with the president still needing to get any agreement through a Congress that has concerns about any pact that does not include Canada.
"Anything other than a trilateral agreement won't win Congressional approval and would lose business support", the U.S. Chamber of Commerce said in a statement.
On Twitter, Trump posted, "Wow, I made OFF THE RECORD COMMENTS to Bloomberg concerning Canada, and this powerful understanding was BLATANTLY VIOLATED".
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Also nettlesome is a provision in the U.S. -Mexico deal that shields U.S. makers of biologics - ultra-expensive drugs produced in living cells - from generic competition for 10 years instead of the eight Canada is willing to live with: The Canadians fear the protection will drive up drug prices and make their government health care system more costly. He was involved in tough negotiations for the Canada-U.S.
The 24-year-old NAFTA tore down most trade barriers dividing the United States, Mexico and Canada.
In a reflection of the gravity of the situation, Trump abruptly canceled his golf game to keep working on a deal, according to Sarah Huckabee Sanders. Nieto's successor, Andrés Manuel López Obrador, has had representatives at the U.S. -Mexico talks, but if the deal is not signed before he takes office he could add new demands and complicate the deal.
A short time later, he added: "The Worker in America is doing better than ever before". Neither U.S. nor Canadian negotiators are talking publicly about the issues that divide them. Ottawa does have other complaints.
"Right now, the US has the negotiating leverage in the negotiating room but Canada has the leverage in terms of Congress, the business community and the general USA public, but that balance will not last forever", Ujczo said. Also, Congress must approve any rewrite of NAFTA, signed under President Bill Clinton, and might refuse to endorse a deal that leaves longtime ally Canada on the sidelines.
But the talks with Canada snagged over the mechanisms used to resolve disputes among partners, and on Ottawa's strictly controlled dairy sector. And Trump has further threatened to put 25 percent tariffs on cars and auto parts sent from Canada into the United States - a move he could make without Congress' permission.