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Canada & Mexico Hit Back at Trump Tariffs With Tariffs on US Whiskey, Orange Juice, Steel & Aluminum

Cue Donald Trump's trade war.
Enrique Peña Nieto Justin Trudeau Mexico Canada tariffs

Enrique Peña Nieto President of Mexico and Canadian Prime Minister Justin Trudeau walk during a meeting as part of the official visit of Canadian Prime Minister Justin Trudeau to Mexico City at Palacio Nacional on October 12, 2017 in Mexico City, Mexico. (Photo by Hector Vivas/Getty Images)

The North American Free Trade Agreement (NAFTA) was signed by Canada, Mexico, and the United States, creating a trilateral trade bloc in North America. It allowed the three nations to enjoy special trade relations within and negotiate as a team without.

The agreement came into force on January 1, 1994 after being approved by congress then signed by President Bill Clinton. But the actual negotiations happened under the Republican administration of President George H. W. Bush, who signed the agreement December 17, 1992 before passing it to congress.

The primary goal of NAFTA eliminated barriers to trade and investment between the United states, Canada and Mexico.

Economists consider NAFTA beneficial for the United States. The U.S. Chamber of Commerce credits NAFTA with increasing U.S. trade in goods and services with Canada and Mexico from $337 billion in 1993 to $1.2 trillion by 2011. A reassessment in 2015 found the agreement still benefited the United States.

But President Trump takes a different view on American trade agreements.

Since taking office, the president announced or enacted numerous tariffs, including on steel and aluminum. Tariffs of 25 percent on steel imports and 10 percent on aluminum took affect on Canada and Mexico as of midnight Friday in Washington, DC.

Our allies retaliated in kind creating the beginnings of a trade war. Canada and Mexico, currently engaged in talks with the Trump administration on NAFTA, responded with new tariffs of their own.

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