But he said a quick conclusion to trilateral negotiations appears unlikely.
Trump was quick to proclaim the agreement a triumph, pointing to Monday's surge in the stock market, which was fueled in part by the apparent breakthrough with Mexico.
The deal with Mexico centers on rules surrounding the automotive industry. Trump says, "If they'd like to negotiate fairly, we'll do that".
He indicated he would take a tough line with Canada on autos and dairy tariffs, long a source of tension between the neighboring countries. Another is Congress, with key figures saying Monday that Canada - the top buyer of USA exports - should be included.
But Trump wasn't saying much about Canada, other than "we'll see if Canada can be part" of a new continental arrangement. "If not, the United States of America may have to take action".
Canadian Foreign Minister Chrystia Freeland is expected to travel to Washington for talks on Tuesday. Belanger said, would be for the Trump administration "to quit NAFTA and sign a partial agreement with Mexico". The government went on to say the proposed agreement will create "more reciprocal trade that grows the economy, supports high-paying jobs for American workers and protects American intellectual property". Many manufacturers have built vital supply systems that depend on freely crossing all three NAFTA borders. The same may be said for the president's tactics to lure China, the European Union and other partners to the table.
However, it was unclear whether the administration has the authority to substitute NAFTA with a two-nation trade agreement.
"The U.S. market and the Canadian markets are very intertwined", Mnuchin said.
Negotiations between the United States and Mexico resolved a major stumbling block on auto manufacturing. Yet it is far from final. Even after being formally signed, Mexico's lawmakers also must ratify it. Absent a signed agreement, the Trump administration can not ask Congress for that legislation. "Any new deal must raise wages, ensure workers' rights and freedoms, reduce outsourcing and put the interests of working families first in all three countries". He added that the administration's positioning of Monday's announcement as a big win may be premature.
A senior administration official, who briefed reporters on condition of anonymity, said yes: The administration can tell Congress it had reached a deal with Mexico - and that Canada is welcome to join.
The new deal will affect farmers, although the president hasn't released specific details on the agriculture changes.
Mr Trump then pressed another button and said: "How are you?" "A trilateral agreement is the best path forward", he said, adding that millions of jobs are at stake.
Prime Minister Justin Trudeau had a "constructive conversation" with Mr. Trump on the progress with Mexico, the prime minister's office said. Currently, about 62% of parts are required to be produced in the United States, Mexico or Canada. Trump retorted that his Canadian counterpart was "very dishonest and weak". A fresh round of tariffs on autos would be more painful. However, President Trump considers NAFTA "one of the worst deals" in trade history, and in his ongoing global trade war, he has mentioned wanting to rewrite the deal. Sunset clause: The agreement will last for 16 years, and will be reviewed every six years. Earlier this year, 36 Republican senators including Senate Majority Leader Mitch McConnell calling on Trump to keep the deal intact while modernizing it. Trump could try to abandon the deal without Congressional approval, but the move would likely draw legal challenges.