The Canadian dollar could be a great buy in April

1) Trump wants deregulation more than a NAFTA deal

If there is one thing you should read today on NAFTA, it's this. Businessweek writes about how Trump wants to use NAFTA to deregulate the US. The President has a fast-track authority on trade deals with a simple majority in Congress. Within the bill, the US is negotiating a 'competitiveness' clause that would be country-specific, i.e. they would only apply to individual countries. That would allow Trump to quicken approvals on environmental standards and fast-track construction. The lobbiests love it.

2) NAFTA is a battle but China is the war

Why is seemingly everyone getting an exemption from steel and aluminum tariffs? I believe it's because Trump never wanted to hurt the entire globe, he just wanted to bring everyone to the negotiating table. A little noted leak from negotiations with the EU said the US wanted to rally the EU to take on China.

I think the same tactic is going to be used in NAFTA negotiations. The US will ask Canada and Mexico to stand at its side in future trade battles with China in exchange for a deal. That's a tough offer to turn down.

3) The clock is ticking

The Mexican election is coming July 1 and the campaign starts in May. There aren't going to be negotiations during the election and a new administration in Mexico could send the entire thing backwards. Then the US had mid-term elections in November.

A deal might never get done.

So Trump is left with the option of taking a deal now, or getting no deal.

'No deal' might sound better to some but I think Trump believes he can spin any deal into a 'win' more easily than 'no deal'.

For some insight into his way of thinking, Billy Bush was out last week talking about Trump and he revealed a conversation they had about ratings for the Apprentice. Trump kept saying it was #1 but Bush checked and it wasn't true.

As Bush tells it:

"Later, when the cameras were off, he said, 'Billy, look, you just tell them and they believe it. That's it: you just tell them and they believe. They just do."

Trump has long said that NAFTA is the "worst deal ever". Why? He's never really explained it. Could he can roll out a new NAFTA deal with some cosmetic changes and say it's a better deal? Why not.