The Mexican peso is soaring after President Donald Trump's trade adviser, Peter Navarro, said the US sees Mexico as part of a regional "powerhouse."
Navarro, who is the head of the White House National Trade Council, said in an interview with Bloomberg, "We have a tremendous opportunity, with Mexico in particular, to use higher rules of origin to develop a mutually beneficial regional powerhouse where workers and manufacturers on both sides of the border will benefit enormously."
He said the Trump administration is specifically looking at the rules of origin, which stipulate what percentage of a product must be made in the US for it to be considered "Made in America." Navarro told Bloomberg: "It's just as much in their interests as it is in our interests to increase the rules of origin."
"The North American area can be a tremendous powerhouse in the global economy under the right set of bilateral trade agreements," he added. Notably, individual bilateral trade agreements with Mexico and Canada would be a change from the current three-nation trade deal, the North American Free Trade Agreement (NAFTA).
The Mexican peso is up by 0.9% at 19.4843 per dollar as of 10:31 a.m. ET.
Trump made the debate over free trade one of the central topics of his campaign. He argued in favor of ripping up trade deals, said NAFTA was "the worst trade deal in the history of the country," and called the Trans-Pacific Partnership, or TPP, "a rape of our country."
And the president has on multiple occasions stated his intent to "renegotiate" NAFTA.
More recently, Commerce Secretary Wilbur Ross told Bloomberg TV, "We're in a trade war. We've been in a trade war for decades. That's why we have the deficit." He added that his team was open-minded about the North American Free Trade Agreement discussions.