The Mexican peso is getting smashed following reports the White House is getting ready to pull out of NAFTA.

The currency was down by 2% at 19.2445 per dollar as of 12:36 p.m. ET.

Earlier Wednesday, citing two White House officials, Politico reported that the Trump administration was considering an executive order on withdrawing the US from the North American Free Trade Agreement.

A draft order, written by Peter Navarro, the head of President Donald Trump's National Trade Council, in close cooperation with White House chief strategist Steve Bannon, has been submitted for the final stages of review and could be released late this week or early next week, according to Politico.

Here's the peso:

Markets Insider

NAFTA is a trade deal among the US, Mexico, and Canada. It was negotiated under President George H.W. Bush and implemented under President Bill Clinton in 1994 after heated debate in Congress.

NAFTA eliminated most tariffs, such as taxes on imports and exports, on traded goods among the three nations. It put in place processes to get rid of other trade barriers too.

The point of NAFTA was to encourage economic integration among the US, Mexico, and Canada. And that, by extension, was supposed to boost economic prosperity for all three.

Trade can theoretically improve economic efficiency and make everyone wealthier by allowing countries to specialize in what they're good at. More concretely, one effect of increased economic integration would be for US firms to move production over to Mexico where labor is cheaper than in the US or Canada — for example, with the auto industry.

Trump made the debate over free trade one of the central topics of his campaign. He argued in favor of ripping up trade deals, said NAFTA was "the worst trade deal in the history of the country," and called the Trans-Pacific Partnership, or TPP, "a rape of our country."

During his first week in office, Trump signed an executive order regarding his intent to pull the US out of the TTP. Additionally, he has on multiple occasions stated his intent to "renegotiate" NAFTA.

Head over here to read about NAFTA and its effects on the US economy here.