Why Markets Rallied on Trump’s Trade Deal

U.S. and Mexico make NAFTA breakthrough, increasing chances of final deal

Mexico and the United States are close to agreement on bilateral issues in the renegotiation of the North American Free Trade Agreement (NAFTA), a top Mexican official said on Monday, as U.S. President Donald Trump tweeted a "big deal" was "looking good".

"We'll get rid of the name NAFTA", Trump said.

Mexican President Enrique Peña Nieto joined the group by phone for the announcement. Those are the words of Mexico's Economy Minister Ildefonso Guajardo last week as he summarized the progress of talks to renegotiate the North American Free Trade Agreement, according to The Wall Street Journal.

Calling the deal "very good" for USA farmers and manufacturers, Mr Trump said Mexico has agreed to purchase "as much farm product as possible" immediately.

FBN's Susan Li on Canada's statement responding to the new USA trade deal with Mexico.

Negotiations between the three trade partners have dragged on for more than a year and repeated threats by Trump that he would ditch the 1994 accord have roiled financial markets, putting pressure on the Mexican peso and the Canadian dollar.

Under its mandate from the U.S. Congress, American negotiators are only authorized to negotiate a trilateral NAFTA agreement. Canada must wait. Their Tariffs and Trade Barriers are far too high.

Another key part of the new trade deal increases the percentage of a auto that must be made in North America to qualify for lower-tariff import into the USA.

Canada's Foreign Affairs Minister Chrystia Freeland is now overseas on a diplomatic trip to Germany, Ukraine and France.

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People over the age of 50 and those with compromised immune systems are more at risk than the general population. The Department of Health in Bay County has confirmed a third case of West Nile Virus infection in Panama City.

On cars, the two sides also settled on rules that will require 40-45 percent of each vehicle to be made by workers earning at least $US16 an hour. Without Canada, America's No. 2 trading partner, it's unclear whether any new USA trade agreement with Mexico would be possible.

Mr Trump has been critical of NAFTA, signed in 1994, which he blamed for sending U.S. manufacturing jobs to Mexico.

Officials want to reach an agreement before the newly elected Mexican president, Andres Manuel Lopez Obrador, takes office in December.

It also puts other countries on notice that Mr. Trump isn't backing down from his America-first trade policies and his use of tariffs to force concessions from major trading partners such as China and the European Union.

But Trump has called the agreement "the worst deal maybe ever signed" and moved ahead with tariffs earlier this year.

None of that stopped Trump from giving the impression on Monday morning that he was "terminating" NAFTA "and going into this deal" with Mexico.

"Canada's signature is required", spokesman Adam Austen said in an email.

The United States and Mexico have reached a preliminary agreement resolving key bilateral trade issues. The U.S. wanted to bring back auto manufacturing jobs that had gone to Mexico.

Trump says that they are starting talks with Canada immediately.

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