President Donald Trump and his Mexican and Canadian counterparts are likely to publicly tout signs of progress in renegotiating NAFTA when they meet in Peru on Friday, even if the hard details are not resolved.
Analysts say the anticipated nod of endorsement from the three leaders at the Summit of the Americas will be a likely prelude to a renegotiated North American Free Trade Agreement in coming weeks.
Negotiations between the three countries, previously mired by unpalatable U.S. demands, have made progress just as Trump's rhetoric against China's trade policies increased. Trump last week threatened tariffs on another $100 billion in Chinese goods after China retaliated with threats of its own tariffs on American agricultural and other products. That was in response to the Trump administration's earlier proposed $50 billion in tariffs on Chinese goods.
As for North American trade, there has been an effort to reach an agreement in principle this month as election activity in Mexico ramps up ahead of a July 1 vote. There even appears to be progress on the thorniest issue — the U.S. demand for more NAFTA and U.S. components in automobiles.
"From a policy point of view, they all have an incentive to make this work. The Republicans need to demonstrate to the agricultural places in this country that are going to be important for the House and Senate races that trade policy is not going to just be hurting them," said Tom Block, Fundstrat Washington policy advisor.
Block notes that the farm states, which would be hurt by proposed Chinese tariffs on grains, are all Republican strongholds that had voted for Trump.
"I think that they're looking for a way of demonstrating that they're going ... to be tough on China but show they have an ability to walk and chew gum at the same time and they can be more accommodating toward NAFTA," said Block. "I think that's going to send a signal to the agricultural and business communities that 'we're going to be smart about this and not just blindly anti-trade.'"