The NAFTA talks that have yet to see Canada cut a deal after a stalemate with the U.S. has led to a stark warning from President Trump. The U.S. president said that he did not want to hurt Canada's economy but warned he was not above imposing taxes on cars that would be "devastating" for the northern country.
Trump issued a brief statement aboard Air Force One saying, "If I tax cars coming in from Canada, it would be devastating. But I don't want to do that. I do use that as leverage in negotiating, where they don't want to give us some points. I say that's ok, I'd rather tax your cars coming in, and I win a lot of points because of it."
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The comments were delivered while Trump was on his way to Fargo, North Dakota. At the same time, Foreign Minister Chrystia Freeland was meeting in Washington with U.S. Trade Representative Robert Lighthizer. The pair has been working on behalf of their respective countries to reach a deal that would keep Canada in the North American Free Trade Agreement.
Freeland offered a brief update after a two-hour meeting saying "you could say at this very intense point that we are really in a continuous negotiation." That is where Freeland's hints stopped as he would not even say whether the negotiations would continue into the next week. Lighthizer's next stop is a visit to European Trade Commissioner Cecilia Malmström next week in Brussels.
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One of Trump's top economic advisers Larry Kudlow said Friday morning on Fox news that U.S. access to Canada's protected dairy market is the last hiccup preventing the two countries from reaching an agreement. "I am just saying 'Let go.' Milk, dairy, drop the barriers, give our farmers a break," Kudlow said.
Pressure on Canada mounted last week when the U.S. and Mexico reached a preliminary agreement to replace the 24-year-old North American Free Trade Agreement with a new one. Although Canada is the third NAFTA country, the U.S.'s northern ally was not present at the talks.
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