The Canadian dollar tumbled as much as 0.9% to C$1.3001/USD, the weakest level since July 5, 2017, after U.S. Trade Representative Robert Lighthizer poured more cold water on the current state of Nafta talks, saying today's negotiations fell short of expectations and that time is running out for a new deal.

Speaking to reporters in Mexico City, Lighthizer said that despite hard work of negotiators, "the countries didn’t make the progress that many had hoped for in the current Nafta round" adding that to complete Nafta 2.0 countries will need agreement on roughly 30 chapters, while "so far, only six have been closed."

Ominously, he added that "now our time is running very short,” especially in light of presidential election in Mexico, midterms in the U.S., and local elections in Canada. "I fear the longer we proceed, the more political headwinds we will feel."

"We must resolve our outstanding issues soon to maintain the possibility of having this measure considered by the current Congress."

He left off with some hope, noting that “we are prepared to work continuously to achieve a breakthrough”, although that may be cold comfort on the same day in which Trump warned there would be no steel break for Canada or Mexico without a "fair" Nafta agreement. Of course, what is "fair" to the US is quite "unfair" to the other two Nafta member nations.

Responding to Lighthizer, Canada and Mexico's trade representatives followed their US counterpart, with a notable difference in tone between the two, supporting some suspicions that US talks are going better with Mexico than Canada.

Canada's Freeland reminded that she is still determined to get a good deal, not any deal. Freeland also said that if the Trump Administration pursues steel penalties against Canada, it would find that unacceptable.

Meanwhile, Mexico's Guajardo talked up a "landing space" that exists for a deal "with great assets" and spoke to the progress expected in the near-term. He says that to reach an agreement, everyone needs to be aware of each others positions.

In short, while Trump has yet to decide if he will formally launch import tariffs against Mexico and Canada which threaten to blow up the concurrent trade negotiations, the outcome of the Nafta talks remains a hostage and has, so far at least, gone largely nowhere at least from the US perspective.