Trump criticizes Canada, says he still wants new NAFTA ratified
JPMorgan Chase & Co. has issued a warning about the future of the new NAFTA if U.S. President Donald Trump attempts to rush the ratification process amid political fissures in Washington.
“There are indications that the [Trump] administration seeks to complete the deal potentially in August – but in our view, this compressed timeline could very well put [U.S. President] Trump on a collision course with House Speaker Nancy Pelosi sooner rather than later, with risks of a major NAFTA accident,” analysts Daniel Hui, Paul Meggyesi and Patrick Locke wrote in a recent note to clients.
“Accelerating the approval process will likely meet resistance from House Democrats, led by Speaker Pelosi,” they added, warning that this poses a “significant risk” to the ratification of the deal, which negotiators from Mexico, Canada and the U.S. reached late last year.
The FX analysts said the potential of a mishap informed its bearish forecast on the Canadian dollar in January, in which they predicted the loonie would fall to 74 cents US by mid-2019, having previously forecast that it would be around 77 cents US.
Meanwhile, Trump ramped up his efforts to get the deal passed while speaking at the GOP’s spring dinner in D.C. Tuesday night, urging lawmakers to ratify the pact. He also took aim at Canada during his speech.
“We love Canada. … But they knock the hell out of us on trade,” he said.
The JPMorgan analysts said in addition to obstacles in Washington - Canada and Mexico’s insistence on having steel and aluminum tariffs removed is another key hurdle in getting the deal past the finish line.