In a joint statement, the two nations said the new United States-Mexico-Canada Agreement (USMCA) would "result in freer markets, fairer trade and robust economic growth in our region".
Despite Trump's rhetoric, the new agreement keeps the framework of NAFTA largely intact, maintaining the status quo of free trade between the three countries.
"It'll probably or possibly be just USM".
Trump said it was unfair and economically crippling to dairy farmers.
A high-ranking team of Canadian officials, including Canadian PM Justin Trudeau, Canada's Ambassador to Washington David MacNaughton, and Foreign Affairs Minister Chrystia Freeland, were thrashing out the details of the deal via video conference with Washington over the weekend.
Early Monday, U.S. stocks rallied on this news with the Dow and the S&P 500 trading very near record highs at their peaks, but markets lost steam throughout the trading day with the small-cap Russell 2000 dropping more than 1.3%. With a satisfied smile, the president said the new name had a "good ring to it", repeating U-S-M-C-A several times.
According to the officials, the new trilateral pact, which will be called the U.S. -Mexico-Canada Agreement, or USMCA, includes provisions to prevent Canada's supply management system from affecting the world market in dairy products. But few of them opened their own stores, and over time the licences were amalgamated and given to the B.C. Wine Institute to manage for the benefit of the province's wine industry. Kushner played a similar role with Mexico - in that case, his close relationship was with Luis Videgeray, the Mexican foreign secretary, helped propel those talks to fruition.
The two countries are also working on an agreement that would shield Canada if Trump goes ahead with his threat to tax imported cars, truck and auto parts.
Trump, flanked by trade ambassador Robert Lighthizer, adviser and son-in-law Jared Kushner and a who's who of his inner circle, called the new agreement the most important trade deal the US has ever made. One of the officials said the discussions between Canada and the US were ongoing, but progress was being made.
The pact, underpinning $1.2 trillion in annual trade, is based on "fairness and reciprocity", according to Trump, who added that it was reached after disagreements with his counterparts in Mexico City and Ottawa, Enrique Pena Nieto and Justin Trudeau. "I just don't think it gets wiped away and resolved with an agreement in principle on the trade agreement".
The new trade deal bears a lot of similarities to NAFTA, but there are major differences as well.
A triumphant President Trump lavished praise on the new trade deal his administration negotiated with Canada and Mexico during a Rose Garden ceremony Monday morning - hailing it as "the single greatest agreement ever signed".
Canada's automakers appear to be the big winners from a renegotiated trade pact between Canada, the US and Mexico, while steel and aluminum makers and dairy producers have less to celebrate.
"About 12 o'clock last night", Trump told reporters at a press conference at the White House Monday.
"This has happened, despite assurances that our government would not sign a bad deal for Canadians", Pierre Lampron, the organization's president, said in the statement.
The officials declined to say how large a share of the Canadian market would be open to USA dairy products.
Under the USMCA, Canada is offering the USA a 3.6-per-cent share of the dairy market.
Eighty-four percent of aluminum produced in Canada, or 2.5 million metric tons, is exported to the US each year, meaning the 10 percent tariff imposed by the Trump administration poses a significant threat to the Canadian industry.
Canada, the United States' No 2 trading partner, was left out when the US and Mexico reached an agreement last month to revamp NAFTA.