Stock markets rallied on Monday following President Trump’s announcement that the United States had reached agreement with Mexico on revising NAFTA.
The Dow Jones Industrial Average closed up 259 points — turning positive for 2018 — while the NASDAQ topped 8,000 for the first time and the Standard & Poors 500 closed at a record 2,896.74.
The news was praised by the San Diego Regional Chamber of Commerce, which has repeatedly stressed the importance of the North American Free Trade Agreement to the regional economy.
“After a process of many starts and stops, it is promising news to see the U.S. and Mexico reach an agreement on NAFTA,” said Jerry Sanders, president and CEO of the chamber. “While details have yet to be revealed and some issues remain outstanding, including sign-off from Canada, we are optimistic that this signals a continued path forward for trilateral trade.”
However, President Trump and White House officials indicated the agreement could be limited to Mexico, and Trump himself suggested changing the name because “the name NAFTA has a bad connotation because the United States was hurt very badly.”
But the President also revealed that talks to include Canada would resume shortly. “We’ll see if Canada can be part of the deal,” he said.
A big deal looking good with Mexico!
— Donald J. Trump (@realDonaldTrump) August 27, 2018
According to initial reports, the deal would require 75 percent of auto content to be made in the United States and Mexico, up from 62.5 percent, and that 40 to 45 percent of auto content be made by workers earning at least $16 per hour.
The revised trade agreement, including the addition of Canada, would also need congressional approval before it can go into effect.
Sanders noted the importance of including Canada, pointing out that that it is the second largest consumer of San Diego’s goods and services after Mexico.
Updated at 2:35 p.m., Monday, Aug. 27
