Trump explains why he didn’t cancel NAFTA, and still could if he wants to

U.S. President Donald Trump insists he wasn’t bluffing about threatening to pull out of NAFTA this week. He says he was two or three days away from doing it — really. But he also says he had a change of heart during phone calls with the leaders of Canada and Mexico.

”I like both of these gentlemen very much,” Trump said Thursday, recapping this week’s roller-coaster of drama involving the North American Free Trade Agreement.

”I respect their countries very much. The relationship is very special. And I said, I will hold on the termination; let’s see if we can make it a fair deal.”

He also hinted at a more subtantive reason for not announcing a pullout of NAFTA: economic disruption.

The mere rumour of it happening this week, floated by the White House, shaved almost two per cent off the Mexican peso and a third of a cent off the loonie, while businessmen and lawmakers were up in arms.

Just the agriculture industry by itself produced enough scared quotes to fill a newscast. Pork producers called the idea of cancelling NAFTA financially devastating. Corn producers called it disastrous. The head of the U.S. grains lobby said he was shocked and distressed.

Trump conceded that renegotiating NAFTA is simpler: ”And so I decided (to do that) rather than terminating NAFTA, which would be a pretty big shock to the system.” He emphasized, however, that he retains the right to cancel NAFTA if he can’t get a deal.

And that, according to numerous trade-watchers, is what this week was really about: leverage. It’s a view shared by some within the Canadian government — that Trump wants to flex some muscle entering the negotiations, and the threat to pull out is his strongest lever.

That lever was brandished this week when stories started appear