President Donald Trump on Thursday warned the US could still “terminate” its two-decade old free trade agreement with Mexico and Canada if it did not get a “fair deal” from a renegotiation of the pact, only hours after dropping a plan to pull out.

Mr Trump said he had been ready to submit a notification with withdraw from the North American Free Trade Agreement “two or three days from now” but had decided against it after speaking to his Canadian and Mexican counterparts. 

“They asked me to renegotiate and I will and I think we will be successful in the renegotiation, which frankly would be good,” Mr Trump said, conceding that pulling the US out of the pact that underpins more than $1tn in annual trade and the North American supply chains that many US companies rely on would be a “pretty big shock to system”.