The collapse of the 1994 trade deal would reverberate throughout the global economy, inflicting damage far beyond Mexico, Canada and the United States and affecting industries as varied as manufacturing, agriculture and energy. It would also sow at least short-term chaos for businesses like the auto industry that have arranged their North American supply chains around the dealâs terms.
The ripple effects could also impede other aspects of the presidentâs agenda, for example, by solidifying political opposition among farm state Republicans who support the pact and jeopardizing legislative priorities like tax reform. And it could have far-reaching political effects, including the Mexican general election in July 2018 and Mr. Trumpâs own re-election campaign.
Business leaders have become spooked by the increasing odds of the trade dealâs demise, and on Monday, more than 310 state and local chambers of commerce sent a letter to the administration urging the United States to remain in Nafta. Speaking in Mexico on Tuesday, the president of the U.S. Chamber of Commerce, Thomas J. Donohue, said the negotiations had âreached a critical moment. And the chamber has had no choice but ring the alarm bells.â
âLet me be forceful and direct,â he said. âThere are several poison pill proposals still on the table that could doom the entire deal.â
The potential demise of the trade deal prompted supportive messages from labor unions, including the A.F.L.-C.I.O. and the United Steelworkers, as well as some Democrats.
âAny trade proposal that makes multinational corporations nervous is a good sign that…