Question

What would happens if Trump dumps NAFTA? Explain what is NAFTA.

Answer 1

• If Trump exists NAFTA the tariff on the goods or the taxes that Canada and Mexico put on its goods will increase.
• This would cause the prices to spike up.
• These prices would cut the company profits.
• If NAFTA is Exited, the WTO rules would be applicable for trade between US and Mexico.
• Tariffs on agricultural Exports to Mexico will become costly.
• Supply chain will be disrupted.
• Prices would also increase for Mexican fruits and vegetables that fills US grocery stores.

But withdrawal from NAFTA could set a stage for the new trade.

NAFTA:-

• North America Free Trade Agreement.
• Agreement signed by three countries.
• Canada, Mexico and US.
• These countries create a tri-lateral trade in North America.
• Has two supplements.
• North American Agreement on Environmental Cooperation.
• (NAAEC) and
• North American Agreement on Labour Cooperation (NAALC).
• World's largest free trade Agreement since 1989.
• Became effective on January 1st1994.