Trade deficits

The Clinton administration signed the North America Free Trade Agreement (NAFTA) and it was supposed to offer trade between Mexico and Canada without any import taxes. There is some argument but many experts believe the agreement can be cancelled by giving six months notice. Trump has talked about building a wall on our southern border and having Mexico pay for it. The US currently imports 58 billion more from Mexico than what the US exports to Mexico so we have negative balance of trade. Trump can threaten to cancel NAFTA if Mexico refuses to pay for the wall or he can cancel the treaty and place a ten percent import tax which will pay for the wall in two years. He can bypass this by saying that any goods produced by American companies in Mexico will face an import tax when they bring these products into the US. This will discourage American companies from moving to Mexico and keep jobs here in the US. Mexico like most of our trading partners needs the US far more than the US needs Mexico so they will come around using the right negotiating skills.