NAFTA 2.0 Is Just the Next Step of Trump's Trade Wars

John Dale Grover

economy, Americas

And it clears the path to further confront China.

Donald Trump announced on October 1 his congratulations to Mexico and Canada for working out a trade deal with America. That agreement revises and keeps the North American Free Trade Agreement (NAFTA) that has economically bound together the United States, Mexico, and Canada since 1994. These minor revisions to NAFTA are overall good news for America and are one more step in Washington’s trade wars.

The new agreement means that most of NAFTA—along with the majority of its benefits—were kept in place with some tweaks. Also, the changes to NAFTA allow Trump to claim victory domestically. This will let him turn his sights away from steadfast U.S. allies and towards significant rule-breakers like China. With the home front secure, Washington can more readily proceed with its trade wars abroad.

For now, U.S. steel and aluminum tariffs on Canada and Mexico remain in place subject to future talks but these are likely to be resolved. Additionally, the deal increases minimum wages for Mexican auto workers and also raises the number of made-in-North America car parts required for a vehicle to be compliant with NAFTA. In exchange, both Mexico and Canada get to avoid American tariffs on automobiles for sixteen years.