- Canada is increasingly convinced Trump will announce that the U.S. intends to pull out of the North American Free Trade Agreement, two government sources told Reuters on Wednesday.
- General Motors shares dropped 2.4 percent, Kansas City Southern fell 3.6 percent, while Constellation Brands declined 1.2 percent after the report. Ford Motor closed down 0.4 percent.
Shares of companies and ETFs that benefited under NAFTA are falling after a report that President Donald Trump could announce an exit from the long-standing trade agreement.
Canada is increasingly convinced Trump will announce that the U.S. intends to pull out of the North American Free Trade Agreement, two government sources told Reuters on Wednesday.
NAFTA is a big deal for the auto industry. Under current rules, 62 percent of a car must be made in the U.S., Canada or Mexico to avoid tariffs. The Trump administration has said it wants to raise that to 85 percent and wants 50 percent of that to come from the United States. That would raise costs for manufacturers.
Kansas City Southern owns railroad track in the U.S. and Mexico. It offers significant cross-border transportation services for companies.
Constellation Brands is an international beer, wine and spirits company with operations in the U.S., Mexico and Canada. It also imports beer brands such as Corona Extra and Modelo Especial.
Mexico and Canada together represent nearly one-third of total U.S. agricultural exports. American corn farmers could be big losers if NAFTA gets tossed since Mexico was the top export market for corn last year, while Canada is also a major market for the crop as well as ethanol. Mexico already has started buying more corn from Latin American countries.
— CNBC's Robert Ferris and Jeff Daniels contributed reporting.