Donald Trump promised to end the “disastrous” NAFTA agreement as soon as he took office. Then, reality slapped him across the face and Trump had to figure out a way to save face and keep America’s economy moving. The problem is that NAFTA has intertwined the economies of Canada, México and the United States into a global economic machine that depends on all three pieces to work.
Faced with this reality, Donald Trump tried to “renegotiate” the NAFTA deal under the guise that he would give negotiation a try before gutting the whole scheme. Except that Canada and México wouldn’t play along. The problem for Trump is that the Republicans and the business elites know that gutting NAFTA would kill the American economy, not to mention Mexico’s as well. This forced Trump into the “renegotiation” gambit and it failed for Trump.
The Trump administration tried to sneak in face-saving demands, like a five-year sunset clause and enhanced origination rules for automobiles. Had he succeeded in the sunset clause, Trump was going to argue that the five years gave him the opportunity to make “a great deal” on NAFTA without killing the American economy. The rules of origin for automobiles would have allowed Trump to proclaim the “victory” of looking out for the American automobile worker.
Canada and México wouldn’t go along. For Donald Trump, it is Canada that killed his scheme.
Bottom line, Donald Trump hates México and Mexicans. When he first announced that he was going to kill NAFTA, he assumed that Canada wouldn’t mind too much, and Trump would get his México-bashing headlines. But, Canada wasn’t going to hurt its economy to pacify a Trump tantrum, so it wouldn’t go along with the American schemes of a sunset clause and a change of rules of origin for cars. Thus, Canada, just joined México in Trump’s list of countries Trump targets with his tirades.
But, México has a special place in Trump’s world view of hated countries and NAFTA is too important to the American economy. Unable to complete a NAFTA renegotiation before the American midterms and the Mexican presidential elections, Trump must now look for a way out. México’s unwillingness to pay for The Wall makes Trump even angrier.
Thus, Trump is faced with three choices; kill NAFTA, allow it to remain as it is, or find a way to hurt México without killing the American economy. The first choice, to kill NAFTA, is a no go because the American economy would be devastated. The second choice of allowing NAFTA to stand for now does no good for Trump’s hatred of México and further alienates his xenophobe base.
So, Trump needs to figure out how to hurt México without killing the American economy.
For that, Donald Trump’s new scheme is “to divide and conquer.” Trump wants to negotiate a new treaty separately between Canada and the United States. Trump wants to pit Canada against México to try to force Canada to abandon México and negotiate directly with Trump’s administration a trade agreement outside of NAFTA.
Donald Trump believes that a separate trade agreement with Canada would allow it to save the American economy while he continues to try to destroy México through killing NAFTA.
How it’ll play out is still too soon to tell.
Understanding this dynamic then it makes sense why Trump has been antagonizing Canada verbally and through trade while also trying to bring México to heel through immigration and the rhetoric about The Wall while imposing illegal tariffs on both countries.