US President Donald Trump has announced a trade “understanding” with Mexico that could lead to an overhaul of the North American Free Trade Agreement (Nafta).

Mr Trump made the announcement in the Oval Office, with Mexican President Enrique Pena Nieto joining by speakerphone.

Canada, which is part of Nafta, did not participate in the announcement.

Mr Trump said negotiations with Canada have yet to begin and is calling on the country to negotiate fairly. He is threatening to slap tariffs on Canadian cars if they fail to do what he wants.

Mr Trump says the call is being held to “celebrate the understanding” the US and Mexico have reached on trade.

He said: “It’s an incredible deal for both parties.”

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Press Association