UPDATE: Trump Declares Auto Trade Deal with Mexico

President Donald Trump says the U.S. and Mexico have reached a preliminary trade agreement regarding auto manufacturing in both countries.

He also declares that he intends to terminate the much broader North American Free Trade Agreement between the two countries and Canada. The president adds that he wants to drop the NAFTA name in any case, branding the 24-year-old pact as “a rip-off” for the U.S.

Mexico reportedly agreed to a U.S. demand to raise the local content requirement for free trade between the countries to 75% from the current 62.5%. Other elements include requirements to use more locally produced steel and aluminum, and to ensure that at least 40% of each vehicle’s content be manufactured by workers who earn at least $16 per hour.

Reports say the countries also agreed to review the pact in six years, replacing an initial U.S. demand that the deal automatically expires in five years unless re-ratified by the participants.

Trump tells reporters that Canada may become part of the tentative accord with Mexico, strike a separate agreement with the U.S. or, if such talks aren’t successful, face import duties on cars shipped from Canada to the U.S.

Last week Mexico told reporters it would not ratify a NAFTA deal unless Canada was part of the result. Republican congressional leaders are echoing the same desire.

Mexican President Enrique Pena Nieto tells reporters his goal is to reach a trilateral handshake agreement by the end of this week. Canada’s top negotiating team is expected to arrive in Washington, D.C., on Tuesday to review the details of the deal announced on Monday.

Achieving a tentative agreement would begin a 90-day review by Congress and enable Pena Nieto to sign the accord before his successor takes office on Dec. 1. Incoming President Andres Manuel Lopez Obrador has been generally supportive of a revised trade deal but is considered likely to seek changes in today’s deal.