US farm groups said their first goal in negotiations for the new NAFTA was to maintain duty-free access for farm exports to Canada and Mexico, followed by such issues as Canada's supply management system for dairy, poultry, and eggs.
There was also an agreement to protect 2.6 million exports a year of Canadian vehicles to the United States from possible United States tariffs of 25% that Mr Trump may impose.
The United States and China are locked in a spiraling trade war that has seen them level increasingly severe rounds of tariffs on each other's imports.
The Canadian dollar surged to its highest since May against the USA dollar, gaining around 0.5 percent from Friday's close.
For Trump, the agreement reached in the weeks before the November congressional elections offers vindication for his hardline trade policies that have roiled relations with China, the European Union and America's North American neighbors while causing concerns among Midwest farmers and manufacturers anxious about retaliation. Trump said he spoke to Trudeau by phone and told reporters that their recent tensions didn't affect the deal-making.
"I don't think it did". "He's a professional. I'm a professional", Trump said, calling it a "fair deal". The new bargain will replace the North American Free Trade Agreement (NAFTA) adopted in 1994.
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The deal was reached after Prime Minister Justin Trudeau called a meeting with his cabinet late Sunday, following a breakthrough in negotiations.
Those remarks set the stage for a bitter struggle over trade, with Trump threatening to drop Canada from the regional trade pact altogether if it didn´t yield to key USA demands.
With regards to the European Union, for example, he said the White House would "respectfully" put tariffs on cars if a satisfactory deal can't be reached. We have lost so many jobs over the years under NAFTA.
- CP24 (@CP24) 1 October 2018Trump says steel and aluminum tariffs will remain in place for the time being, but he says "we are working on that now".
"Likewise, it will be the most advanced trade deal in the world, with ambitious provisions, on the digital economy, patents, financial services and other areas where the United States has a strong competitive advantage", he said.
Trump threatened to go ahead with a revamped NAFTA, with or without Canada. It will then need to be ratified by congress. In return, the United States will allow more Canadian dairy, peanuts, and peanut products to come to America.
Critics say the clause impedes Canada's freedom to negotiate any future bilateral-trade deal with China - something Ottawa has shown interest in doing - because it may effectively give the United States a seat at the table, if not an implicit veto over a Canada-China free-trade pact. President Trump has long denounced NAFTA, so despite the fact the same countries are involved, the name, too, has changed.