Trump's Stance on NAFTA Could Damage Canada's Economy

President-elect Donald Trump’s pledge to renegotiate an existing free trade agreement to stop US companies from moving to Mexico could damage the Canadian economy by curtailing exports to the United States, the Fitch ratings service said in a press release on Tuesday.

WASHINGTON (Sputnik) — According to the release, the Trump administration's stance on trade with Canada remains unclear.

"Whether the new administration will view trade with Canada in the same terms as trade with Mexico, which Trump had threatened with large import tariffs during his presidential campaign, is not clear."

Trump’s criticism of the North American Free Trade Agreement (NAFTA) during the presidential campaign centered on US companies moving factories to Mexico.

Trump threated to impose 35 percent tariff on imports from relocated factories in Mexico, but he made no mention of Canada, which depends on the US market for more than three-quarters of its exports, the release noted.

The Canadian government has indicated a willingness to discuss renegotiation, citing potential benefits for Canada in such a review, according to Fitch.

Like the United States, Canada has also seen some manufacturing move to Mexico under NAFTA.

Nevertheless, Fitch warned that lengthy renegotiation would create uncertainty and may delay investment in new export capacity that would improve Canada's export performance.