Loonie, Peso Jump After Peter Navarro Says He Wants US, Canadian, Mexican Trade "Powerhouse"

Tyler Durden's picture

Peter Navarro is again making headlines, and moving markets, when moments ago Trump's top trade advisor was quoted by Bloomberg as saying he wants the US, Canada and Mexico to form a trade "powerhouse", supposedly one which is quite different from the existing "NAFTA" trade arrangement. 

Navarro is said to be "quietly working to forge an alliance with Mexico, even as U.S. plans to build a border wall and threats to withdraw from Nafta continue to inflame tensions with its third-largest trading partner."

Navarro, who as head of the White house National Trade Council will play a leading role in the effort to re-negotiate the North American Free Trade Agreement, said in an interview the U.S. wants Mexico and Canada to unite in a regional manufacturing “powerhouse” that will keep out parts from other countries.

The Trump administration is re-examining a critical component of the free trade pact: the rules of origin, which dictate what percentage of a product must be manufactured in the U.S. for it to carry a Made in America label, Navarro said.


“We have a tremendous opportunity, with Mexico in particular, to use higher rules of origin to develop a mutually beneficial regional powerhouse where workers and manufacturers on both sides of the border will benefit enormously,” said Navarro. “It’s just as much in their interests as it is in our interests to increase the rules of origin.”


For example, under the current agreement, 62.5 percent of the total value of cars sold in North America must originate in the U.S., Canada or Mexico to avoid import tariffs. The U.S. wants to raise that threshold, making it harder for parts from other countries to enter the supply chain.

As Bloomberg also adds, Navarro’s comments hint at the strategy the U.S. may use to negotiate a successor to the 23-year-old NAFTA agreemenet. Commerce Secretary Wilbur Ross has said serious talks with Mexico and Canada should begin in the “latter part” of this year.

Since the comment appears less combative than some more aggressive trade-related statements out of the administration, the market has taken it in stride and has sent both the Canadian Loonie and the Mexican Peso to session highs.

It is unclear if the statement was provoked by the recently disclosed "civil war" taking palce at the White House between Navarro and Trump's ex-Goldman advisors who are seeking to push the "isolationist" as far from Trump's circle of influence as possible.

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Boris Badenov's picture

This is the most brilliant idea in a long time.

Looney's picture


Loonie and Peso could merged into Loopie.  ;-)


BorisTheBlade's picture

Or Penie.

Though back in the day when this idea was originally floated, combined currency was envisioned to be called Amero.


froze25's picture

LOL, awesome, I literally just bought FMX at 10:30am as a play on the Peso and growth in trade with Mexico. Awesome!

chubbar's picture

This sounds like the same bullshit North American Union (NAU) that was on the table since Bush. How the fuck does that make Navarro an "Isolationist"? What it sounds like to me is the same assholes that thought this shit up 20 years ago are still hanging around trying to get this thing off the ground.

How does protecting either Mexico or Canada from foreign parts being brought into their countries help US workers? It doesn't, is the short anwer.

I'm not interested in hearing about any fucking trade union at all. None of them are designed to help US workers because those countries wouldn't agree to it, just like the last time we got suckered into NAFTA and CAFTA. It's all bullshit and Trump knows it. I wish I could figure out why he has these asstards on this advisory council because none of them seem to understand what Nationalism is all about. Come on Trump, get these guys on the right track with this shit!

crossroaddemon's picture

You can't figure out why these guys are on his advisory council? Naive much?

CPL's picture

They are down to one 'juice box' and the Israeli contingent overlooked a couple of things.  No one here has to do anything, the dye is already cast on them.  The C130's all buzzing around atlanta right now are all trying to hold a line they will fail at.  It has already started, they are a day late and a dollar short.



CPL's picture

They are trying to sell the NAU/NAFTA again.  Here's the answer.


\\No.  Other problems that need to be addressed in individual nations LONG before that happens.  They need to go sharpen the pencil just after closing the door behind them on that proposal.  If they want to hire a professional to help them put together an engineered model that will be done in an open public quorum they have my email address.  Bring bitcoins if you want to pay for those services.

Tallest Skil's picture

The North American Union will never happen and anyone who tries will be executed for treason.

If the Canucks want to increase the power of their currency, they can vote–province by province–to join the Union.

SMG's picture

And we'll call it the North American Union.  Trump I voted for you to stop this globalist crap.  I'm starting to think they got to you.

crossroaddemon's picture

Sigghhh... they didn't get ot him. They had him from the start. Big difference.

MFL5591's picture

Great idea but a solid currency does not exist for any of these 3 countries to export!

silverer's picture

Oh, you had to bring that up didn't you? That's on next weeks plate, along with about 75 other major FUBAR situations, lol.

Mr Twitch's picture

"think they got to you" Maybe but more likely Trump was always the false flag.

That being said, every president has promised more border security and a wall in his campaign speeches.

NuYawkFrankie's picture

At first glance, I read the headline as "Loonie Pelosi Jumps!"

Shoulda known it was just too damn good to be true - especially when there was no accompanying  photo of ther Golden Gate Bridge.... 8(((((

SmilinJoeFizzion's picture

clowns to the left of me, jokers to the right....

HRClinton's picture

United States of North America. GOP style. As opposed to DNC style.

2 sides of same coin.

SmilinJoeFizzion's picture

"ex Goldman advisors" they have their talons in him already

chubbar's picture

The ex goldman advisors are trying to sell Navarro as an Isolationist because he wants to revive the NAU??  Nice try assholes. This idea is as far from being isolationist as possible. Fucking Goldman people would whore out their mother if it would make them another dime. Come on Trump, wake the fuck up!!!!

Albertarocks's picture

Canada, minding her own business as usual, has quietly forged friendly and productive trade relationships with nearly every country on earth.  If Navarro thinks Canada is going to sever all those ties of friendship and good business he's got rocks in his head. The great white north has a good reputation for a reason.  Pure theatre.

chickadee's picture

Loonie? Jump? What jump? Same handle as yesterday.

redtie's picture

I want my Obamacare repeal now dammit !!!

crossroaddemon's picture

And you will... AFTER Trumpcare has been passed. Did you really expect anything different?

Trucker Glock's picture

Isn't all fiat currency loonie?

ChemtrailPilot's picture

Headline is a lie, if you read the actual comment he's saying he wants to force more manufacturing to be done specifically in the US, yet ZH would have us believe he's pimping a NAFTA-like arrangement. Cut it out with the lying, sensationalist headlines ZH (LOL that will never happen)

baldknobber's picture

So we need to get rid of the North American Free Trade Agreement and replace it with the North American Powerhouse Trade Agreement ?

Would this fall under the Make America Great Again banner or the Change I Can Believe In banner ?

sudzee's picture

Good move. Higher exchange rate reinforcing a possible drop in rates as we go headlong into recession. Rates can never rise until gov's at all levels get a piece of rise in property prices. With budget comin down next week many are expecting a 50 rise in capital gains taxes to plug a 30 billion federal deficit. Provinces are in the same shape and will seek a windfall as well. 

Yen Cross's picture

  Moar bullshit wordplay.

robertocarlos's picture

I don't see how we can possibly get goods from Canada to Mexico without running into the US Navy bloackade. Maybe we will use MASA.

novictim's picture

Mr. Navarro, the cake sits there before us.  We can either eat it or we can still have the cake.  Not both.

We hired President Trump to institute Tariffs and force industry back to the USA.  We demanded that a wall be built to stop the flood of illegal migrants from continuing to lower wages.  We demanded that H1B Visa labour be scaled dramatically back thus allowing Americans to take those jobs and earn higher wages.

Higher wages create higher demand for goods and services, Mr. Navarro.  That then leads to economic growth.  

We cannot make America Great Again without realizing that TARIFFS and Labour constrictions were what made it great in the first place!!!

ToSoft4Truth's picture

No wall now?  Has Trump made Mexico the American Worker's friend?


Why did Trump get elected again, repealing Obamacare; jailing Hillary?? 

crossroaddemon's picture

None of that was ever gonna happen. You didn't know?

mary mary's picture

Chelsea, we're already building the wall, and YOU are going to pay for it.

JBilyj's picture

Fuck Trump and his shitty Goldman Sachs henchmen!

mary mary's picture

Irresponsible "quien es mas macho?" Mexicans still need to take the First Step and man-up about their out-of-control knocking-women-up rates, though, and we can't make them do that, so the wall still goes up.

ThanksIwillHaveAnother's picture

More Gov Managed Trade.  Certainly not Free Trade.  Other imbalances will develope.  Peg to Gold to solve problems but Congress wouldn't like that.