U.S. proposes to replace NAFTA with two separate agreements

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The President of the United States Donald Trump has revived the idea of canceling the North American Free Trade Agreement (NAFTA) and draft instead two bilateral agreements: one with Canada and one with Mexico .

While the request isn't new and both Mexico and Canada previously defended the trilateral agreement, this new insistence comes at the beginning of a trade measure which has angered all parties involved.

Last Friday, the U.S. imposed a 25% tariff on steel imports and a 10% one to aluminum imports for Mexico, Canada, and the European Union.

“You're talking about a very different two countries. I wouldn't mind seeing a separate deal with Canada where you have one type of product...and a separate deal with Mexico,” said president Trump.

For her part, Canada's Minister of Foreign Affairs Chrystia Freeland qualified the tariffs as “illegal” and announced the Canadian government has filed a challenge of the tariffs before the World Trade Organization (WTO) .

The European Union has also opened a dispute settlement case before this organization, which gives them 60 days to resolve the matter,

“We are not in a trade war,” stated EU Trade Commissioner Cecilia Malmström , “But we are in a very difficult situation caused by the United States.”

While the EU seems to have a list of goods to hit with retaliatory tariffs – such as jeans and Harley-Davidson bikes – they haven't made any official announcement.