NAFTA in the firing line

President Donald Trump sees the renegotiation of NAFTA as an opportunity to close the trade deficit with Mexico and return manufacturing jobs to the US. It’s possible that he could gain modest concessions while leaving the rest of the treaty broadly intact, but there is a clear risk that negotiations fail and the treaty is scrapped, particularly in light of the current diplomatic spat over Trump’s proposed border wall. However, this would probably deal a bigger blow to the integrated supply chains of US auto manufacturers than to the economy overall.