Donald Trump has praised Justin Trudeau after admitting there was "tension" between the pair before they agreed to revamp the North American free trade agreement (NAFTA).

The $1.2tn (£920bn) free-trade zone had been on the verge of collapse after 24 years - with Canada facing the prospect of being left out of a deal between the US and Mexico.

The US president put aside months of animosity between him and Canadian Prime Minister Justin Trudeau to praise his counterpart.

Mr Trump told a news conference at the White House: "There was a lot of tension between he and I and, more specifically, it's all worked out.

"He's a good man and he loves the people of Canada."


Image: Donald Trump and Justin Trudeau during a G7 summit in Canada in June

With an overnight deadline approaching, negotiators reached a deal which the two countries which they said would "result in freer markets, fairer trade and robust economic growth in our region".

"These measures will support many - hundreds of thousands - American jobs," Mr Trump said.

"It means far more American jobs, and these are high-quality jobs."

In earlier tweets, Mr Trump hailed the "historic agreement" between the three countries.

Late last night, our deadline, we reached a wonderful new Trade Deal with Canada, to be added into the deal already reached with Mexico. The new name will be The United States Mexico Canada Agreement, or USMCA. It is a great deal for all three countries, solves the many...... — Donald J. Trump (@realDonaldTrump) October 1, 2018

....deficiencies and mistakes in NAFTA, greatly opens markets to our Farmers and Manufacturers, reduces Trade Barriers to the U.S. and will bring all three Great Nations together in competition with the rest of the world. The USMCA is a historic transaction! — Donald J. Trump (@realDonaldTrump) October 1, 2018

Congratulations to Mexico and Canada! — Donald J. Trump (@realDonaldTrump) October 1, 2018

Mr Trump had threatened to walk away from NAFTA unless major changes were made - blaming the deal for the exodus of manufacturing jobs to Mexico.

But it was a deal with its northern neighbours that proved tougher to reach for the US.

Mr Trudeau said it was a "good day for Canada".

A senior Trump administration official said the new agreement was a "great win for the president and a validation for his strategy in the area of international trade".

Image: Donald Trump has criticised the impact of NAFTA on American workers

US officials intend to sign the agreement at the end of November, after which it will be submitted to congress for approval, a US official said.

The deal will preserve a trade dispute mechanism that Canada fought hard to maintain, to protect its lumber industry and other sectors from US anti-dumping tariffs.

But it came at a cost, with Canada agreeing to provide US dairy farmers with access to about 3.5% of its $16bn annual domestic dairy market, according to Canadian sources - and Canadian farmers hurt by the deal set to receive compensation.

There was also an agreement to protect 2.6 million exports a year of Canadian vehicles to the US from possible US tariffs of 25% that Mr Trump may impose. That is more than the two million units currently exported.

But the deal failed to resolve US tariffs on Canada's steel and aluminium exports.

Mexican foreign secretary Luis Videgaray said: "It's a good night for Mexico and for North America."