CNN says he might simply go ahead with renegotiations, as originally planned.
Trump campaigned for president in 2016 on a platform that included renegotiating or abandoning the trade agreement, which he claimed was "the worst trade deal maybe ever signed anywhere" in a September debate with Hillary Clinton.
Article 2205 of NAFTA allows a member country to withdraw from the agreement by giving six months written notice to the other members.
"It is a clear indication that they (in the White House) are wanting changes but we will have to see what emerges", said Paul Ferley, assistant chief economist at Royal Bank of Canada. By taking both steps, the White House would give itself more flexibility to choose a different outcome in several months.
Nafta had long come under particular scorn from Trump.
But the NAFTA issue did seem to lose some urgency after the first few weeks of Trump's presidency as his administration focused on other topics.
One thing's certain, he said: the move would scare people. "But clearly he hasn't". Earlier this week, he fueled trade tension by imposing new duties on lumber imports from Canada and vowing to defend US farmers against dairy protections in its neighbor.
Trump's comments on NAFTA came just days after the United States imposed 20 percent tariffs on softwood lumber coming from Canada.
"These are trade negotiations", Brady, the chairman of the House Ways and Means Committee, said.
"Signaling the US intent to withdraw from NAFTA runs absolutely counter to that goal", Moore says.More news: Canadian PM responds to lumber tariffs imposed by the US
"The notion that you're going to have a negotiation that's both fast and productive is just an illusion", Alden added.
The latest dairy trade row was triggered when Canada extended those policies to apply to ultrafiltered milk, a product used in cheese production and at the center of a thriving USA export business.
A similar probe, known as a Section 232 investigation, was announced for foreign-made steel last week.
His trade team, led by Commerce Secretary Wilbur Ross, must trigger a 90-day consultation period before trade talks can begin.
"Getting a deal done by early 2018 or the end of this year was wishful thinking", said Gary Clyde Hufbauer, a trade expert at the Peterson Institute for International Economics.
Various media say Trump is considering detonating the trade equivalent of a nuclear option: an executive order to withdraw from the trade agreement with Canada and Mexico, a prospect that would terrify industry and business-friendly lawmakers.
"This is not a China-phobic program, this has to do with a global problem", said Ross.
Share with Us - We'd love to hear eyewitness accounts, the history behind an article, and smart, constructive criticism. Jeff Flake said the move would be devastating.
Aluminum imports from China, in particular, have been a focus of the USA government for months. The complex 23-year-old treaty connects three of the world's largest economies, and if Trump had made a decision to withdraw, as many had expected, it could have had a severe and lasting impact on the global economy.
The 12-nation trade deal was a linchpin of former President Barack Obama's Asia policy. "Even a short-term interruption in our exports would have a significant negative economic impact on US pork producers", states Ken Maschhoff, National Pork Producers Council predsident.