The three countries are now part of the North American Free Trade Agreement, and U.S. He called the agreement "a really good deal for both countries", and added that negotiations with Canada will start soon, or additional tariffs on Canadian imports will be applied.
Stocks are rising broadly as the USA and Mexico prepare to announce the details of the new trade agreement. "It has a bad connotation because the United States was hurt very badly by NAFTA for many years", President Trump said.
President Trump's ability to secure a major victory in his trade agenda could hinge on whether Canadian Prime Minister Justin Trudeau will go along with his controversial approach, as many USA lawmakers are insisting on Canada's participation before they approve any deal.
On the US side, also participating in the call were US Trade Representative Robert Lighthizer and Trump's adviser and son-in-law Jared Kushner. USA goods and services trade with Canada totaled an estimated $544.9 billion in 2016, with a trade surplus of $11.2 billion.
"Toyota is pleased to hear that progress is being made by U.S. and Mexico negotiators to reach a consensus on modernizing NAFTA", the vehicle maker said.
Officials want to reach an agreement before the newly elected Mexican president, Andres Manuel Lopez Obrador, takes office in December.
Whatever it's called, the deal appears significant, but it lacks detailed specifics.
If auto content and wage agreements go forward with Canada on board as well, it could stem the flow of auto sector jobs to lower wage jurisdictions, Unifor president Jerry Dias said.
But Canada is likely to object to revisions in Nafta that include rules that will make it harder for treaty members to challenge U.S. trade penalties.
Trump even gave the bilateral agreement a name: the "US-Mexico Trade Agreement", which he said would replace the trilateral free trade deal.
"It's quite clear that the White House wants Canada to feel the heat of a threatened auto tariff and is going to try to seek some visible concessions from Canada relative to what's in the existing NAFTA deal", he said. It would also require 40% to 45% of the auto to be made by workers earning at least $16 an hour.
"There are still issues with Canada but I think they could be resolved very quickly", a senior trade official told Reuters in an interview.
The move, sought by the United States, puts Canada in a hard position because Prime Minister Justin Trudeau had insisted on maintaining Chapter 19 as a way to fight US duties on softwood lumber, paper and other products that it views as unfair. "Let's make a great deal like we just made with Mexico", Kudlow said.
The Trump administration will now work in partnership with Mexico to bring Canada to the table for a new and potentially separate deal.
In a statement, Trump said "America has ... finally turned the page on decades of unfair trade deals that sacrificed our prosperity and shipped away our companies, our jobs and our Nation's wealth".
Canadian Foreign Minister Chrystia Freeland will travel to Washington, D.C., on Tuesday for negotiations.
"I believe the president is on the phone", he told reporters.