'I was all set to terminate': Inside Trump's sudden shift on NAFTA

"I was all set to terminate," Trump said in an Oval Office interview Thursday night. "I looked forward to terminating. I was going to do it."

There was just one problem: Trump's team - like on so many issues - was deeply divided.

As news of the president's plan reached Ottawa and Mexico City in the middle of the week and rattled the markets and Congress, Commerce Secretary Wilbur Ross, Agriculture Secretary Sonny Perdue and others huddled in meetings with Trump, urging him not to sign a document triggering a U.S. withdrawal from NAFTA.

Perdue even brought along a prop to the Oval Office: A map of the United States that illustrated the areas that would be hardest hit, particularly from agriculture and manufacturing losses, and highlighting that many of those states and counties were "Trump country" communities that had voted for the president in November.

"It shows that I do have a very big farmer base, which is good," Trump recalled. "They like Trump, but I like them, and I'm going to help them."

By Wednesday night, Trump - who spent nearly two years as a candidate railing against the trade agreement - had backed down, saying that conversations with advisers and phone calls with the leaders of Canada and Mexico had persuaded him to reconsider.

Recalling his late Wednesday conversation with Mexican President Enrique Peña Nieto, Trump said, "He said to me, 'I would really appreciate if we could negotiate instead of you terminating, because terminating sets a lot of things in motion that could be pretty devastating for a lot of people.' "

Trump's declaration to withdraw from NAFTA, followed by his abrupt turnabout, was the latest in a series of abrupt policy shifts and outright reversals in the frenzied lead-up to his 100th day in office, reflecting a president desperate to notch tangible victories and to offer the impression of forward momentum.

It was also another example of the inherent tension between the fiery populist, who ran on a promise to upend Washington, and the pragmatic businessman, who is eager to score wins and is easily influenced by a cadre of chief executive friends and top advisers, many with Wall Street pedigrees.

Trump announced that he was not labeling China a currency manipulator, after months of promising to do so on Day One of his presidency. And he declared NATO "no longer obsolete," after months of saying it was.

He threatened to shut down the government over the border wall, only to retreat on funding for an actual brick-and-mortar structure. And he tasked his team with drafting a complex overhaul of the nation's tax code only to suddenly announce, surprising even his own aides and advisers, that he expected a proposal to be rolled out within days.

In some ways, as Trump nears the 100-day mark of his presidency, he is arguably beginning to find his footing, concentrating on core issues that have always animated him (trade) and others that captivate his business side (taxes). By refocusing on questions of trade and the economy, Trump has returned to more familiar and comfortable territory - the nationalistic populism that has defined him since the 1980s.

"The president has put himself in a perfect position on NAFTA because folks know he's inclined [to be] negative on NAFTA, yet he's open to negotiating," said Chief of Staff Reince Priebus. "It's a good spot to be. The leverage is all with the president."

Unlike his first failed attempt at passing a Republican replacement for President Barack Obama's health-care law, Trump and his team are directing as much activity as possible from within the West Wing, relying on executive orders rather than the more unwieldy but durable process of legislation.

But the approach has worried and alienated many of his closest allies, on Capitol Hill, on K Street and abroad. And it has showcased a president who often seems more interested in short-term accomplishments - and positive cable news headlines - than longer-term policy goals guided by ideology, and who can be swayed by unfolding events or compelling arguments from whomever he talks to last.

"I think they're just going to act whenever they can on executive action," said Chris Ruddy, the chief executive of Newsmax, a conservative media company, and a longtime friend of Trump's. "The problem is it's very temporary, but he wants to get things done, and trade has always been one of his big issues."

Trump, Ruddy added, "is a business guy. He thinks that America gets a bad part of these deals, and he wants to renegotiate them."

With Saturday's 100-day marker fast approaching, and eager for a win, the president turned his attention to taxes.

Trump had privately groused that he wished he had tackled taxes before trying to push through health care, a view magnified by some outside friends and confidants. Even something more modest than the full overhaul for which he hoped, such as cutting corporate tax rates, they said, would provide the president and his base with an energizing triumph.

But it was an April 19 op-ed in the New York Times, titled "Why Are Republicans Making Tax Reform So Hard?" and penned by Steve Forbes, Larry Kudlow, Arthur Laffer and Stephen Moore, that helped propel Trump to act.

The op-ed, written by conservatives who have strong influence within the White House, said an overhaul of the tax code would give Trump a much-needed "legislative victory" and complained that the White House "seems to be all over the map on the subject." It called on the administration to move quickly on a tax proposal, not to overthink it and to push forward "with some degree of urgency."

Trump saw the op-ed right as he was becoming restless with the success of his economic agenda.

The White House rushed to engage the op-ed's authors and reassure the economic conservatives who have privately complained about Trump's nationalistic streak on trade and the lack of action of taxes.

When Kudlow and Moore gathered a group of conservatives Tuesday evening at Cafe Berlin, a white-tablecloth German restaurant on Capitol Hill, Treasury Secretary Steven Mnuchin stopped by, even though he was not scheduled to attend.

"We texted him and said, 'Come by if you'd like,' " Kudlow said. "Well, he did, and he spoke for two or three minutes and took questions."

"Everyone looked around and said, 'This is the Steve we knew during the campaign,' " Kudlow added, referring to Mnuchin's enthusiasm for sweeping tax cuts.

On April 21, two days after the op-ed ran, Trump announced in an interview with the Associated Press that his advisers would be releasing a tax plan by the following Wednesday, or "shortly thereafter."

Some aides working on the plan were stunned, caught unaware of the expedited timeline.

Still, they reasoned, maybe "shortly thereafter" meant they could unveil the plan a week or two later. But hours after the AP interview, during an appearance at the Treasury Department, Trump stood beside Mnuchin and told reporters that the tax plan would come out Wednesday.

The proposal unveiled that day offered some specifics - cutting the corporate tax rate to 15 percent and collapsing seven tax brackets down into three - but was vague in other areas, including just how the government would pay for it. Critics seized on the one-page printout the White House distributed Wednesday with details of the tax plan as the flimsy embodiment of its lack of depth.

"It was a restatement of bullet points that Larry Kudlow and Stephen Moore drafted on the back of a cocktail napkin at the 21 Club," quipped one longtime Washington Republican in contact with the White House.

But the tax proposal - unveiled with great fanfare in a midday briefing with reporters - achieved several of Trump's key objectives, garnering him a day of largely positive headlines; laying at least a baseline marker for a top policy goal; and reassuring Americans, many of whom voted for the promise of a businessman commander in chief, that pocketbook relief would be arriving by next tax season.

"The president was being ill-advised that he had to repeal Obamacare before passing taxes," said Sam Nunberg, a former Trump adviser. "The two are mutually exclusive."

Kudlow spent Wednesday at the White House, chatting with top officials following the rollout of a plan that many credited him with helping to spur.

"If we helped, I'm very pleased," Kudlow said. "I think the president has set a terrific tax reform, economic growth marker."

Still, he dismissed the suggestion that he was the impetus for Trump's swift action on taxes.

The president, Kudlow said, "just wants to move. He's been tied in knots on health care, and he had an impulse to get it together on taxes."

Canada and Mexico were blindsided Wednesday as news of Trump's planned NAFTA withdrawal spread north and south of the border.

Arturo Sarukhan, a former Mexican ambassador to the United States, described the news as a "my way or the highway ambush" from the White House, especially coming amid what has been weeks of steady and amicable discussions among the three countries about revamping the trade agreement.

But Mexico - which was already on edge following Trump's brief flirtation with attaching border-wall funding to a must-pass, short-term spending bill - quickly leapt to action. Two cabinet-level officials in Mexico reached out to their U.S. counterparts to deliver a blunt message: If Trump officially announced the U.S. intention to withdraw from NAFTA, Mexico would not return to the negotiating table.

Mexico would not, the officials warned, negotiate with "a gun to its head."

The president, meanwhile, was hearing a similar message from some of his own senior advisers. Ross, the commerce secretary, and Jared Kushner, the president's son-in-law, scrambled to persuade Trump to back down.

The United States can only trigger the six-month clock to withdraw from NAFTA once, they said. They told the president that he had strong leverage to renegotiate the trade deal but that once he publicly signaled his intent to leave, the situation would become so politically fraught for Canada and Mexico that they would not be able to return to negotiations, even if they wanted to.

In the Oval Office interview, however, Trump repeatedly insisted that he was ready to pull out of NAFTA. At one point, he turned to Kushner, who was standing near his desk, and asked, "Was I ready to terminate NAFTA?"

"Yeah," Kushner said, before explaining the case he made to the president: "I said, 'Look, there's plusses and minuses to doing it,' and either way he would have ended up in a good place."

Perdue, the agriculture secretary, and Secretary of State Rex Tillerson also cautioned Trump against moving ahead, while two of the White House's populists, trade adviser Peter Navarro and chief strategist Stephen K. Bannon, urged him to stay the course, announcing his intention to withdraw in a splashy prime-time rally Saturday night in Harrisburg, Pennsylvania.

The administration also received pressure from hundreds of business executives from around the country, many of whom called the U.S. Chamber of Commerce, asking what was going to happen, before calling the White House directly, urging Trump not to sign the order.

Tom Donohue, the chamber's chief executive, also relayed the message to senior White House officials.

The complaints pouring in from agriculture groups were even more apoplectic, warning White House officials that withdrawing from NAFTA could devastate the U.S. agriculture industry, allowing Mexico to reinstate high tariffs against U.S. exports.

The Mexican government, meanwhile, had "several" contacts with its Canadian counterparts throughout the day Wednesday to share reactions and map out a joint strategy, including separate phone calls between their countries' leaders and Trump that evening.

"We had the same position," said Mexican Foreign Minister Luis Videgaray on Thursday in an interview on Mexican television.

Trump publicly claimed Thursday that his phone calls with Peña Nieto and Canadian Prime Minister Justin Trudeau persuaded him to give negotiations a chance.

But a senior administration official said Trump had already decided to hold off on signing the NAFTA termination letter before his phone calls with Mexico and Canada.

In the interview, Trump recounted his internal deliberations: "In one way, I like the termination. In the other way, I like them - a lot, both of them. We have a very good relationship. And it's very hard when you have a relationship, it's very much something that would not be a nice act. It would not be exactly a friendly act."

But, the president added, he reserves the right to change his mind. "I can always terminate," Trump said. "They called me up, they said, 'Could we try negotiating?' I said, 'Absolutely, yes.' If we can't come to a satisfactory conclusion, we'll terminate NAFTA."

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A few doors from the Oval Office, Bannon works out of what he calls "the war room," a West Wing hideaway adjoining the chief of staff's spacious suite, from which Karl Rove and David Axelrod once worked.

Upon moving in, Bannon cleared out most of the furniture, save for a standing desk and chairs, and plastered the walls with lists of Trump's campaign promises - scores, even hundreds of them, with green check marks or giant red X's over those that have been met.

A list of 10 major pieces of legislation that Trump promised in his "Contract with Voters" hangs from near the ceiling down to the floor. None is crossed out yet.

On Wednesday evening, around the time Trump was talking with his Canadian and Mexican counterparts, one whiteboard contained an ominous marking: "NAFTA" and "April 29." It underscored Bannon's hope that on Saturday night, Trump would sign the paperwork initiating the withdrawal from NAFTA.

Indeed, that same whiteboard contained other trade-specific actions, many boasting already checked-off promises.

Withdrawing from the Trans-Pacific Partnership? Check. Action on the aluminum and steel industries? Check and check.