As Nancy Pelosi slowly but surely released her death grip on the articles of impeachment, allowing his trial to begin in the United States Senate, Donald Trump had reason to celebrate.
He was able to claim credit for two significant (if not perhaps huge) wins on an issue near and dear to his heart: trade. Despite the constant partisan bickering over impeachment, Congress was able to work with the Trump administration to pass the U.S.-Mexico-Canada Agreement, or USMCA. Trump’s replacement of NAFTA sailed through both the House and the Senate, earning widespread bipartisan support and facing little opposition on its way to passage.
The agreement wasn’t as much a trade revolution as it was a re-write, but at least its passage ensures that Trump won’t simply withdraw from NAFTA, leaving nothing in its place. That’s important, as free trade across the continent has proven beneficial to all three nations over the years. Simply allowing it to fall apart with no replacement would have been a huge shock to the economy, so averting that is a victory in and of itself.
Even if the USMCA isn’t really a huge upgrade to NAFTA for the economy overall, it will likely help a few key constituencies sought after by both parties. The agreement will be boost to the auto industry, as it ups the percentage of local parts that need to be in vehicles to avoid tariffs. It will also be helpful to U.S. dairy farmers, as it expands their access to the Canadian market. Helping the auto industry and farmers will be especially beneficial to the Midwest, a region that is vitally important politically to both Trump and the Democrats.
The easy passage of the USMCA through Congress also sends an important signal to the rest of the world: Even when Americans are divided, we can still cross the aisle when necessary to get things done. That shows that simply sowing distrust and discord won’t completely paralyze Washington, leaving the country on the sidelines internationally. It reflects the strength of our democratic system, even in these trying times.
Trump’s willingness to negotiate a replacement for NAFTA also shows the world that despite his tough rhetoric on trade, he really does want better deals rather than simply blowing up the system entirely. That was further proven by his ability to strike the phase one trade deal with China, ratcheting back economic tensions with that country. As with the USMCA agreement, simply calming tensions between the countries is a positive step forward – not only for them, but also for the rest of the world.
The deal with China, however, does indeed contain provisions that would help both countries, if fully implemented. China has agreed to buy more goods from the U.S. (including agricultural products). If these pledges actually come to fruition, they could make quite a dent in the United States’ trade deficit with China – long a major concern for Trump. They probably won’t ever reach the exact levels promised in the deal, but any increase in China purchasing goods from the U.S. can lead Trump to at least declare a political victory on the issue.
Perhaps more important than the pledge to buy more products, China has agreed to increase their protections for intellectual property rights. This has long been a major issue for U.S. companies trying to do business in China, as they’re pressured to give up their technological secrets to Chinese companies just to get access to the market. China’s made similar promises and failed to follow through in the past, but Trump’s tariffs against them (both implemented and merely threatened) may well give them a greater incentive to cooperate this time.
With both the USMCA and the China deal, it may well take years – perhaps long after Trump is out of office – to tell how effective these agreements are and how much they help the U.S. economy. Still, Trump can rightly do an immediate victory lap over these successes. When Trump proposed getting tough on trade, many commentators argued that his approach would both cause a recession and do nothing to create new trade deals. Instead, the economy has continued to roar along and Trump’s been able to implement a pair of major trade agreements. That’s not only a political victory for Trump in an election year, but it could bode well for the future, as we’ll soon need to negotiate a new trade agreement with the United Kingdom, once they finally leave the EU.
Jim Fossel, a conservative activist from Gardiner, worked for Sen. Susan Collins. He can be contacted at:
Twitter: jimfossel
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