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U.S. Ag Sector on Edge as White House Sends Conflicting Messages on NAFTA

President Trump stated in a tweet that he intended to issue an executive order to withdraw from the North American Free Trade Agreement (NAFTA), however, hours later he contradicted his first statement, saying that the U.S. will remain a partner in the trade agreement and will work with Canada and Mexico to renegotiate terms.

The mixed messages have set the U.S. agricultural sector on edge, with grain industry players voicing their concerns over a possible NAFTA exit.

The U.S. Wheat Association (USW) and the National Association of Wheat Growers (NAWG) released a joint statement expressing great concern over a possible withdrawal, stating that Mexico is a key market for U.S. wheat growers, accounting for more than 10 percent of all U.S. wheat exports. Additionally, the two groups state that an exit from the trade agreement could lead to new tariffs on U.S. wheat.

The American Soybean Association also urged caution and pushed for a path of renegotiation, stating that talk of withdrawal prior to attempts at renegotiation is counterproductive. Mexico is the second biggest market for U.S. soybean meal and oil, while Canada is the third largest buyer of U.S. soybean meal and tenth largest for soybean oil.

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