If President Donald Trump and his administration pulled out of NAFTA, it would be an "egregiously stupid decision," closely followed investor Dennis Gartman told CNBC on Wednesday.
Reuters reported that Canada is increasingly convinced that Trump will withdraw from the trade agreement.The Canadian dollar and Mexican peso both fell on the news, as did stocks that have benefited under the 24-year-old pact.
"NAFTA has been a creator of jobs in Canada, in Mexico and in the United States. Mexico and Canada are our two largest trading partners. To turn our backs upon them would be I think a very, very bad decision," the founder and publisher of The Gartman Letter said in an interview with "Power Lunch."
Trump has said he wants to get a better deal for the U.S. and has repeatedly threatened to walk away from NAFTA unless Mexico and Canada agree to make major changes.
Such a move would clearly be detrimental to the Canadian dollar and Mexican peso and would probably be supportive of the U.S. dollar, Gartman said. However, "the benefits that would accrue would be ill-advised," he added.
The Canadian dollar, or loonie, fell to trade down 0.8 percent against its U.S. counterpart. The iShares MSCI Canada exchange-traded fund (EWC), which tracks Canadian stocks, dropped to trade 0.9 percent lower. Meanwhile, the Mexican peso declined 0.5 percent against the greenback.
Earlier Wednesday, U.S. Chamber of Commerce CEO Tom Donohue told CNBC that exiting the agreement "would be an absolute destruction to the advances we've made on the economy and economic growth."
— CNBC's Fred Imbert contributed to this report.