The Mexican peso is tumbling following reports that the Trump administration is preparing to pull the U.S. out of NAFTA.
The Trump administration is considering an executive order on withdrawing the U.S. from NAFTA, according to two White House officials, reports Politico.
The Mexican currency fell 2% at just over 19 per dollar following the report.
The executive order, drafted by Trump’s National Trade Council head Peter Navarro with input by White House chief strategist Steve Bannon, has been submitted for review and could be released within the next week.
President Trump has recently stepped up his rhetoric against the trade agreement, vowing to scrap the entire deal altogether.
“NAFTA’s been very, very bad for our country,” Trump said in a speech in Wisconsin last week. “It’s been very, very bad for our companies and for our workers, and we’re going to make some very big changes or we are going to get rid of NAFTA once and for all.”
During his first week in office, Trump signed an executive order to pull the U.S. out of the TPP (Trans-Pacific Partnership) deal, which would have solidified a 12-nation multilateral trade system with Pacific rim countries like South Korea and Chile.
“The beautiful thing about a bilateral agreement is that if any one of the true parties in the agreement decides at any time they want to get out of the agreement, or they’re not being treated fairly, they can renegotiate much easier,” White House press secretary Sean Spicer said in January. “In a multilateral agreement, that’s not the case.”
NAFTA was implemented by Bill Clinton in 1994, who promised that the trade agreement would increase the number of high quality jobs, reduce illegal immigration, and eliminate trade barriers like tariffs on exports.
Instead, the trade agreement cost the U.S. hundreds of thousands of jobs, doubled the number of illegal immigrants in the country, skyrocketed the trade deficit, and suppressed wages in America with cheap Mexican labor.