(REUTERS/Christian Hartmann)

US President Donald Trump made the debate over free trade one of the central topics of his campaign.

He argued in favor of ripping up trade deals, focusing his ire on China and Mexico, and said NAFTA was "the worst trade deal in the history of the country."

Since his inauguration, he has maintained strong rhetoric against "very unfair" trade practices. However, the Trump administration's actions against trading partners have not yet been as extreme.

"Trump's bark has been worse than his bite," said Neil Shearing, the chief emerging markets economist at Capital Economics, at the firm's Annual Conference in New York on Wednesday.

Trump originally pledged to label China a currency manipulator on his first day in office — he did not. Neither did the Treasury Department in its semi-annual report on currency practices of major trading partners, which was published in April 2017.

It's likely that Trump pulled back on calling China a currency manipulator given the delicate situation with North Korea, which he implied in an interview with The Economist published in May:

"Now, with that in mind, he’s representing China and he wants what’s best for China. But so far, you know, he’s been, he’s been very good. But, so they talk about why haven’t you called him a currency manipulator? Now think of this. I say, “Jinping. Please help us, let’s make a deal. Help us with North Korea, and by the way we’re announcing tomorrow that you’re a currency manipulator, OK?” They never say that, you know the fake media, they never put them together, they always say, he didn’t call him a currency [manipulator], number one. Number two, they’re actually not a currency [manipulator]. You know, since I’ve been talking about currency manipulation with respect to them and other countries, they stopped."

Moreover, although the Trump administration formally launched NAFTA negotiations last month, it seems that the focus will be more on smaller tweaks than a massive overhaul.

US Trade Representative Robert Lighthizer said in his letter to US lawmakers triggering the negotiations that NAFTA needed modernization for digital trade; intellectual-property rights; labor, environmental, and food-safety standards; and rules for state-owned enterprises.

And more recently, Trump shifted his anti-trade rhetoric towards South Korea and Canada, instead.

(The deterioration in surveys is not yet reflected in GDP data in Mexico.Capital Economics)

Notably, the Capital Economics team also shared the adjacent chart comparing Mexico's business surveys to the country's GDP growth as a visual representation of sentiment versus actual data.