WASHINGTON (AFP) - President Donald Trump is "seriously contemplating" making separate trade deals with Canada and Mexico, in place of the two-decade-old North American Free Trade Agreement (Nafta), a White House official said on Tuesday (June 5).

"He prefers bilateral negotiations and he is looking at two much different countries," Trump economic adviser Larry Kudlow said on Fox News.

Mr Kudlow noted that the talks to revamp the North American Free Trade agreement have "dragged on", so separate deals "might be able to happen more rapidly".

"He is seriously contemplating a shift in the Nafta negotiations... (and) he asked me to convey this," he said, adding that Mr Trump "believed bilateral is always better. He hates large treaties."

Mr Trump first floated the idea last Friday of having individual agreements to replace Nafta, which he again called "a terrible deal".

Mr Trump at one point threatened to pull out of the three-nation pact.

Talks have been under way since late 2017 to revise and modernise the deal, but became hung up on US demands to increase American content in duty-free Nafta autos, as well as a five-year sunset clause.

Negotiations are now in suspense due to the coming elections in Mexico and the United States.

Mr Kudlow said he is awaiting a reaction from top Canadian officials to whom he relayed the idea on Monday.

"The important thought is he may be moving quickly towards these bilateral discussions instead of as a whole," Mr Kudlow said, but noted it is not clear how soon that would happen.

However, Mr Kudlow said Mr Trump "will not withdraw from Nafta. He will try a different approach."

The Nafta talks are just one facet of Mr Trump's confrontational, multi-front trade policy, which includes imposing steep tariffs on steel and aluminium coming from chief US allies - Canada, Mexico and the European Union - which has prompted sharp retaliation.