Trump's 'increasingly erratic' attacks on NAFTA trade deal could throw economy into chaos

  • President Donald Trump threatened to walk away from the North American Free Trade Agreement if Mexico does not make changes to their immigration policy.
  • Trump also cited the Deferred Action for Childhood Arrivals program as a necessary fix.
  • Trump's tying of NAFTA to immigration and DACA throws a wrench in already fraught negotiations.

President Donald Trump added another layer to the already tricky negotiations over the North American Free Trade Agreement over the past two days by tying the talks to immigration policy, raising fears that the trade deal could be in jeopardy.

"Mexico is doing very little, if not NOTHING, at stopping people from flowing into Mexico through their Southern Border, and then into the U.S.," Trump tweeted Sunday. "They laugh at our dumb immigration laws. They must stop the big drug and people flows, or I will stop their cash cow, NAFTA. NEED WALL!"

Trump followed up that threat on both Monday and Tuesday, repeatedly attacking Mexico's ability to "stop people from coming through their country and into ours" and calling for Congress to make changes to US immigration policy including the Deferred Action for Childhood Arrivals program, or DACA.

"Cash cow NAFTA is in play, as is foreign aid to Honduras and the countries that allow this to happen," Trump said Tuesday. "Congress MUST ACT NOW!"

RELATED: A look at Trump's awkward handshakes with world leaders

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A history of Trump's awkward handshakes with world leaders
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A history of Trump's awkward handshakes with world leaders
MANILA, PHILIPPINES - NOVEMBER 13: From left to right: Prime Minister of the Kingdom of Thailand Prayuth Chan-Ocha, Russian Prime Minister Dmitry Medvedev, Prime Minister of the Socialist Republic of Vietnam Nguyen Xuan Phuc, US President Donald Trump and President of the Philippines Rodrigo Duterte during a joint photo session of the heads of the summit delegations on November 13, 2017 in Manila, Philippines. (Photo by Alexander Miridonov/Kommersant via Getty Images)
US President Barack Obama shakes hands as he meets with Republican President-elect Donald Trump on transition planning in the Oval Office at the White House on November 10, 2016 in Washington,DC. / AFP / JIM WATSON (Photo credit should read JIM WATSON/AFP/Getty Images)
WASHINGTON, DC - FEBRUARY 10: (AFP OUT) U.S. President Donald Trump (R) and Japanese Prime Minister Shinzo Abe pose for photographs before bilateral meetings in the Oval Office at the White House February 10, 2017 in Washington, DC. Trump and Abe are expected to discuss many issues, including trade and security ties and will hold a joint press confrence later in the day. (Photo by Chip Somodevilla/Getty Images)
Trump Handshake Tajikistan President
U.S. President Donald Trump, left, greets Justin Trudeau, Canada's prime minister, as he arrives to the West Wing of the White House in Washington, D.C., U.S., on Monday, Feb. 13, 2017. Trudeau, hailed by Joe Biden as one of the last champions of liberalism, heads to Washington for his first meeting with Trump, whose bellicose statements and immigration restrictions reveal a deep gulf between the two leaders. Photographer: Andrew Harrer/Bloomberg via Getty Images
US President Donald Trump (L) and French President Emmanuel Macron (R) shake hands ahead of a working lunch, at the US ambassador's residence, on the sidelines of the NATO (North Atlantic Treaty Organization) summit, in Brussels, on May 25, 2017. / AFP PHOTO / Mandel NGAN (Photo credit should read MANDEL NGAN/AFP/Getty Images)
(L to R) German Chancellor Angela Merkel, US President Donald Trump and French President Emmanuel Macron talk ahead a working session on the first day of the G20 summit in Hamburg, northern Germany, on July 7, 2017. Leaders of the world's top economies gather from July 7 to 8, 2017 in Germany for likely the stormiest G20 summit in years, with disagreements ranging from wars to climate change and global trade. / AFP PHOTO / Patrik STOLLARZ (Photo credit should read PATRIK STOLLARZ/AFP/Getty Images)
BRUSSELS , BELGIUM - MAY 25, 2017: King Philippe of Belgium, Donald Trump and Emmanuel Macron during the North Atlantic Treaty Organisation (NATO) summit in Brussels (Picture by Christophe Licoppe/Photonews via Getty Images)
US President Donald Trump (2nd R) shakes hands with French President Emmanuel Macron (2nd L) and his wife Brigitte Macron (L), next to US First Lady Melania Trump, during the annual Bastille Day military parade on the Champs-Elysees avenue in Paris on July 14, 2017. The parade on Paris's Champs-Elysees will commemorate the centenary of the US entering WWI and will feature horses, helicopters, planes and troops. / AFP PHOTO / POOL AND AFP PHOTO / CHRISTOPHE ARCHAMBAULT (Photo credit should read CHRISTOPHE ARCHAMBAULT/AFP/Getty Images)
US President Donald Trump (R) and Indian Prime Minister Narendra Modi (L) hug after speaking to the press in the Rose Garden of the White House in Washington, DC, on June 26, 2017. / AFP PHOTO / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
Polish President's wife Agata Kornhauser-Duda leaves Donald Trump hand on 06 July, 2017 in Warsaw, Poland. US President Donald Trump is on his first visit behind the former Iron Curtain. He is expected to focus largely on defence in talks with Baltic, Balkan and central European leaders. (Photo by Krystian Dobuszynski/NurPhoto via Getty Images)
US President Donald Trump and German Chancellor Angela Merkel meet in the Oval Office of the White House in Washington, DC, on March 17, 2017. / AFP PHOTO / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
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This isn't the first time that Trump threatened to pull the US out of NAFTA, which he called "the worst trade deal in history" during the 2016 campaign. But the threats come at a fraught moment for talks over a new version of the deal.

Throwing another problem on the pile

The negations among the three members of NAFTA — the US, Canada, and Mexico — are already facing problems. Arguments over the treatment of many goods have led to hiccups in the eight months of negations.

Negotiators have so far come to agreement on just six of the deal's 30 chapters, which are large sections of the agreement dealing with different types of goods. While US Trade Representative Robert Lighthizer sounded encouraged after the last round of talk in March, the other countries were less enthusiastic.

Given the huge amount of issues left to sort out, Trump tying changes to unrelated immigration policies to the deal represents another headache for negotiators.

Greg Valliere, chief global strategist at Horizon Investments, said Trump tweets are particularly worrying since Trump appears to need a domestic policy win to ensure the US remains in the trade deal.

"Trump's Easter rant about the Dreamers, apparently in response to a Fox TV piece that morning, was riddled with factual inaccuracies about the DACA program — but the bigger message is that he's willing to scrap NAFTA unless he gets an immigration deal — including a wall — from Congress," Valliere said.

Trump ended the program in September. In contrast to Trump's tweets, it only applies to immigrants, sometimes called Dreamers, who entered the US as minors prior to July 2012Additionally, the DACA negotiations are stuck in a deadlock in large part because of Trump's own unwillingness to make a reach a deal with Democrats.

Chris Krueger, an analyst at Cowen Washington Research Group, said the tweets were just another sign that Trump could pull the US out of the deal on a whim, particularly given the turnover of his economic advisory staff.

"Concerns about potential NAFTA abrogation in the spring and summer months should not be mistaken given that this is all up to the whim of an increasingly erratic chief executive who has carte blanche from a non-existent board of directors," Krueger wrote Monday.

Kreuger said the developments could also weigh on the patience of Mexican and Canadian officials, who have already threatened to walk away from the deal.

RELATED: Faces of Trump's immigration deal
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Faces of Trump's immigration crackdown
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Faces of Trump's immigration crackdown
Mexican national Adalberto Magana-Gonzalez, 44, waits to be processed after being taken into custody by a U.S. Immigration and Customs Enforcement's (ICE) Fugitive Operations team in Santa Ana, California, U.S., May 11, 2017. REUTERS/Lucy Nicholson SEARCH "NICHOLSON ARREST" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES. TPX IMAGES OF THE DAY.
Mexican national Adalberto Magana-Gonzalez, 44, has his fingerprints taken after being taken into custody by a U.S. Immigration and Customs Enforcement's (ICE) Fugitive Operations team in Santa Ana, California, U.S., May 11, 2017. REUTERS/Lucy Nicholson SEARCH "NICHOLSON ARREST" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
The badge of a U.S. Immigration and Customs Enforcement's (ICE) Fugitive Operations team is seen in Santa Ana, California, U.S., May 11, 2017. REUTERS/Lucy Nicholson SEARCH "NICHOLSON ARREST" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
U.S. Immigration and Customs Enforcement (ICE) Assistant Field Office Director Jorge Field (R), 53, arrests Mexican national Adalberto Magana-Gonzalez, 44, in San Clemente, California, U.S., May 11, 2017. REUTERS/Lucy Nicholson SEARCH "NICHOLSON ARREST" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
Mexican national Adalberto Magana-Gonzalez, 44, waits to be processed after being taken into custody by a U.S. Immigration and Customs Enforcement's (ICE) Fugitive Operations team in Santa Ana, California, U.S., May 11, 2017. REUTERS/Lucy Nicholson SEARCH "NICHOLSON ARREST" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
U.S. Immigration and Customs Enforcement (ICE) Assistant Field Office Director Jorge Field (R), 53, arrests Mexican national Adalberto Magana-Gonzalez, 44, in San Clemente, California, U.S., May 11, 2017. REUTERS/Lucy Nicholson SEARCH "NICHOLSON ARREST" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
A U.S. Immigration and Customs Enforcement's (ICE) Fugitive Operations team takes immigration fugitives into custody in Santa Ana, California, U.S., May 11, 2017. REUTERS/Lucy Nicholson SEARCH "NICHOLSON ARREST" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
Handcuffs lie in a box at the U.S. Immigration and Customs Enforcement (ICE) Fugitive Operations office in Santa Ana, California, U.S., May 11, 2017. REUTERS/Lucy Nicholson SEARCH "NICHOLSON ARREST" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
U.S. Immigration and Customs Enforcement (ICE) Assistant Field Office Director Jorge Field (L), 53, arrests an Iranian immigrant in San Clemente, California, U.S., May 11, 2017. REUTERS/Lucy Nicholson SEARCH "NICHOLSON ARREST" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
U.S. Immigration and Customs Enforcement (ICE) Assistant Field Office Director Jorge Field (R), 53, and Field Office Director David Marin arrest an Iranian immigrant in San Clemente, California, U.S., May 11, 2017. REUTERS/Lucy Nicholson SEARCH "NICHOLSON ARREST" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
U.S. Immigration and Customs Enforcement (ICE) Assistant Field Office Director Jorge Field, 53, arrests an Iranian immigrant in San Clemente, California, U.S., May 11, 2017. REUTERS/Lucy Nicholson SEARCH "NICHOLSON ARREST" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
A U.S. Immigration and Customs Enforcement's (ICE) Fugitive Operations team member arrests an Iranian immigrant in Santa Ana, California, U.S., May 11, 2017. REUTERS/Lucy Nicholson SEARCH "NICHOLSON ARREST" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
A U.S. Immigration and Customs Enforcement's (ICE) Fugitive Operations team search for an immigration fugitive in Santa Ana, California, U.S., May 11, 2017. REUTERS/Lucy Nicholson SEARCH "NICHOLSON ARREST" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
U.S. Immigration and Customs Enforcement (ICE) Assistant Field Office Director Jorge Field, 53, arrests an Iranian immigrant in San Clemente, California, U.S., May 11, 2017. REUTERS/Lucy Nicholson SEARCH "NICHOLSON ARREST" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
A U.S. Immigration and Customs Enforcement's (ICE) Fugitive Operations team search for an immigration fugitive in Santa Ana, California, U.S., May 11, 2017. REUTERS/Lucy Nicholson SEARCH "NICHOLSON ARREST" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
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Time is ticking down

While NAFTA talks have been ongoing since August, the added immigration concern comes just as negotiations are hitting a critical stretch over the month of April.

Since the deal is being renegotiated under Trade Promotion Authority, there are a series of steps that would delay any vote on a new deal in Congress by 195 days.

That has created an artificial deadline of May 1 for any deal to get approved this year. After that Congress would either have to take a vote in a lame-duck session after the 2018 midterms or delay the matter entirely, adding another bit of political uncertainty.

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