It seemed that the Trump administration was planning to end the North American Free Trade Agreement on Wednesday, after his aides sent word that they’d prepared such an executive order. By Thursday morning, the president himself reversed that message, tweeting that he’d talked to the leaders of Canada and Mexico and agreed to renegotiate the pact instead of pulling out.
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“There’s a point at which it is cheaper to import directly and forget about NAFTA,” says William Reinsch, a trade expert at the Stimson Center, a Washington-based think tank. Reinsch says the average U.S. tariff for goods from countries outside of North America is 3%, a relatively low tax. There are some companies, he says, that would save money by importing from China or Japan rather than pouring money into new facilities in the U.S.
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