The Canadian dollar and Mexican peso dropped yesterday, along with several key stocks across North America, after Canadian government sources revealed that Ottowa is “increasingly convinced” that President Donald Trump intends to pull the USA out of the North American Free Trade Agreement (NAFTA).

One source – requesting anonymity “because of the sensitivity of the situation” – told Reuters that “the government is increasingly sure about this… It is now planning for Trump to announce the withdrawal.”

Meanwhile, a Mexican government source told the aforementioned news agency that “we have always said that this is a possibility”, referring to a possible US exit from NAFTA.

President Trump has consistently railed against NAFTA since before entering the political arena, and with treaty renewal negotiations ongoing has called for several significant and controversial changes, threatening repeatedly to yank the USA out of the Agreement should they not be forthcoming.

Separately, in another sign of worsening relations between Canada and the USA – which enjoy the second-largest trading relationship in the world – the government in Ottowa on Monday filed a 32-page complaint against its southern neighbour with the World Trade Organisation, accusing the USA of repeatedly breaking trade rules over the last two decades.

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