Trump Protectionism Sets in With Orders Ready to Exit TPP and Renegotiate NAFTA

The U.S. dollar slides as anxiety over Trump's 'America first' agenda sends shock waves through the market.

 President Donald Trump celebrates after inauguration ceremonies swearing him in as the 45th president of the United States on the West front of the U.S. Capitol in Washington, U.S., January 20, 2017.
Reuters

U.S. President Donald Trump could sign an executive order as early as Monday intended to renegotiate the free trade agreement between the United States, Canada and Mexico, NBC News reported, citing an unidentified White House official.

In addition to wanting to renegotiate the North American Free Trade Agreement (NAFTA), the new Republican president also intends to sign an executive order pulling out of the Trans-Pacific Partnership (TPP), NBC reported.

Trump, who was sworn in as the 45th U.S. president on Friday, targeted both trade pacts during his White House campaign.

The dollar fell to a 1-1/2 month low on Monday against an index of the world's other top currencies, after U.S. President Donald Trump struck a protectionist tone in his inauguration speech.

Trump's "America first" message was followed over the weekend by coordinated protests in U.S. cities, testy exchanges between members of his top staff and media and confirmation that key trade pacts were heading for the shredder.

The dollar index, which measures the greenback against six major rivals, fell almost half a percent to 100.28 led by a 1 percent drop to 113.51 yen and a 0.35 percent slide to $1.0750 per euro.

"People had expected some kind of repeat of his victory speech in November, but it was a bit confrontational and has sparked some concerns in the markets that he is going to play hard ball," said Rabobank strategist Philip Marey.

Officials were not immediately available to confirm the report to Reuters. Trump's official schedule includes a 10:30 a.m. EST (1530 GMT) signing of executive orders in the Oval Office.

The president said on Sunday he planned talks soon with the leaders of Canada and Mexico to begin renegotiating NAFTA.

"We will be starting negotiations having to do with NAFTA," Trump said at a swearing-in ceremony for his top White House advisers. "We are going to start renegotiating on NAFTA, on immigration and on security at the border."

Trump said during the campaign he wanted to secure more favorable terms for the United States in the NAFTA pact.

NAFTA, which took effect in 1994, and other trade deals became lightning rods for voter anger in the U.S. industrial heartland states that swept Trump to victory.

CNN reported the first executive action Trump intended to sign was to pull out of the TPP, the trade agreement among 11 Pacific Rim countries that Democratic President Barack Obama strongly backed but was never ratified by the Republican-controlled Congress.