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He prefers bilateral negotiations and he's looking at two much different countries.

"Over the last 24 years, we've built a very integrated supply chain, which has been good for economy, good for consumers, good for workers on all sides". He has repeatedly decried NAFTA as unfair to the USA and has threatened to withdraw from the pact. Bob Corker, the official said.

Trudeau's government has expressed a preference for the three-country deal but has not ruled out the possibility of a two-country deal with the U.S. Such a deal existed from 1989 until the three-country NAFTA replaced it in 1994. On Tuesday, Kudlow doubled down. Kudlow says Trump is "just going to try a different approach".

"I think the important thought here is he may be moving quickly towards these bilateral discussions instead of as a whole", Kudlow said.

"I wouldn't mind seeing a separate deal with Canada, where you have one type of product, so to speak, and a separate deal with Mexico", he said.

The tariffs, meanwhile, have further complicated the U.S.

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The Trump administration also announced last week that it would impose stiff tariffs on steel and aluminum imports on Canada and Mexico, prompting the countries to prepare retaliatory duties on US goods. It will impose a 20% tariff on US pork, apple and potato imports and 20% to 25% levies on cheeses and bourbon.

Prime Minister Justin Trudeau and Mexican President Enrique Pena Nieto renewed their commitment to NAFTA last week after the tariffs were imposed.

During their exchange, Public Safety Minister Ralph Goodale accused Scheer of focusing on partisanship rather than maintaining a common front against American trade belligerence.

"He is very seriously contemplating kind of a shift in NAFTA negotiations", Kudlow said on "Fox & Friends".

An anonymous senior Canadian official told AFP that Canada was not taking such an option off the table, but would prefer to keep the NAFTA agreement alive. Two two leaders "agreed to continue working toward a mutually beneficial outcome" on NAFTA, said Trudeau's office.