Trump wants separate trade deals with Canada, Mexico, says adviser Kudlow

Trade Tensions With Canada Rise Ahead of G-7

White House economic adviser Larry Kudlow said during an interview on "Fox & Friends" Tuesday morning that the president was contemplating a "shift in NAFTA negotiations", to bilateral discussions.

Stored rolls of steel are seen outside the ArcelorMittal Dofasco plant, an integrated steel producer, in Hamilton, Ontario, Canada, March 7, 2018.

The Canadian government is rejecting a push by the Trump administration to strike separate, bilateral trade deals with Canada and Mexico instead of pushing ahead with a stalled effort to renegotiate the North American Free Trade Agreement.

"Countries that are different probably deserve different deals", he said.

Talks to update NAFTA, which has been in place since 1994, have stalled recently as a result of demands from Canada and Mexico that the US drop a number of provisions, including one that would see the trade deal expire after five years and provisions related to wages of Mexican autoworkers. "Canada's a different country than Mexico".

The price of oil, one of Canada's major exports, fell following a report that the USA government had asked Saudi Arabia and other major exporters to increase oil output.

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"We want a trilateral agreement - we've always said this", said International Trade Minister Francois-Philippe Champagne.

On Friday, Trump said he might prefer to end NAFTA in favor of separate bilateral agreements with the two USA neighbors. They have different problems. "He hates these multilaterals. he hates large treaties".

Separating NAFTA talks into US-Canada and US-Mexico trade talks would add complexity and extra time, and reduce the economic benefits.

Canadian Prime Minister Justin Trudeau called the tariffs an affront to the longstanding security partnership between Canada and the United States, and Canada announced retaliatory steps.

The comments come after Mexico issued retaliatory tariffs Tuesday morning, on USA steel and agricultural products.

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