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Larry Kudlow, top economic advisor to the White House, said he hoped Canada would look at successful trade negotiations between Mexico and the U.S. for inspiration as its own round of talks kicks off this week, otherwise the U.S. might have to resort to auto tariffs.
"We hope Canada is watching carefully at how successful negotiations can go," he said. "We really would like a deal with them."
Kudlow appeared on CNBC on Monday after President Donald Trump announced the U.S. had reached a new agreement on trade with Mexico that could pave the way to replace NAFTA.
The administration has been trying to renegotiate the 24-year-old deal between the U.S., Mexico and Canada for months. Canada will now have to enter the talks after staying on the sidelines while talks advanced with Mexico. "If we can't get a good strong fair deal with Canada ... the U.S. might have to resort to auto tariffs," Kudlow said, citing a threat the president has previously made.
"Hopefully Canada will cooperate and move the ball in our direction," he said.
The new deal with Mexico is for 16 years, to be reviewed every six years. It has to be approved by Congress. U.S. Trade Representative Robert Lighthizer told CNBC on Monday that the plan doesn't cap imports of light vehicles from Mexico but does leave steel and aluminum tariffs in place.
Mexico's foreign minister said Monday during a news conference that his country would proceed with the deal, which Trump renamed the United States-Mexico Trade Agreement, even if Canada and the U.S. fail to agree to terms.