The American People Come Out Ahead
(Finally) in Trump’s New NAFTA Deal ~
American Liberty Report, 8/28/18
Pres. Donald J. Trump may have just earned his biggest victory
for everyday Americans so far by reaching agreement on the framework of trade
deal with Mexico.
Once again making good on his campaign promises, the president
has been embroiled in heated trade spats over inequities in NAFTA, U.S.-EU
tariffs and a grotesque disparity with China. In recent months, the EU yielded
to White House-imposed tariffs and details are in the works to eliminate
inequality with a zero-tariff goal.
The president has been a long-time critic of the uneven
Clinton-era NAFTA deal that many point to as destructive to the nation’s
manufacturing base. The president also scuttled the Trans-Pacific Partnership
touted by Hillary Clinton and the Obama Administration.
Pres. Trump heralded the hard-won concessions by his negotiating
team and tipped his cap to their Mexican counterparts.
“We’ve all worked very
hard and your brilliant representatives are sitting right in front of me and I
thought we would congratulate each other before it got out,” Trump told Mexico
Pres. Enrique Pena Nieto. “I know we’ll have a formal news conference in the
not-too-distant future.”
“It’s a big day for trade, big day for our country, a lot of
people thought we’d never get here because we all negotiate tough. We do, so
does Mexico,” Pres. Trump reportedly said.
Although several left-leaning media outlets have attempted to
demonize efforts to renegotiate a fair and balanced trade agreement with Mexico
and Canada, the president’s recent break through changes the world trade
landscape in an unprecedented fashion. Bad actors such as China are witnessing
American resolve and the rebirth of the country’s economic dominance. The Trump
win will also put the protectionist policies of Canada under strict scrutiny as
North America trade shifts.
What’s in the U.S.-Mexico
Agreement?
The announcement by the
presidents marked a leap forward in North American trade. The deal has not yet
been finalized as the U.S. and Mexico await a potential agreement with Canada
that would effectively rewrite NAFTA.
Pres. Trump has gone on the record stating that he would be
willing to move forward with a bilateral agreement. Significant concern exists
over Canada’s protectionist dairy industry tariffs. The northern neighbor has
effectively blocked American dairy farmers from selling products in its
markets.
Following five weeks of hotly contested bilateral negotiations,
the U.S. and Mexico have come to terms on the following trade changes.
·
Automobiles originating outside a NAFTA country would be subject
to a tariff of 75 percent. This marks an increase from the current 62.5
percent.
·
Between 40-45 percent of any freight hauled into the U.S. must
be made by workers paid $16 per hour or higher. U.S. unions have been calling
for this change.
·
Rules will tighten to force the supply chain to produce more
domestic apparel. Much of the clothing in U.S. retail outlets originates in
China.
·
Increased intellectual property protections by enhancing
enforcement and extending minimum copyrights to 75 years. Again, China has been
repeatedly cited for intellectual property theft.
·
Digital content such as e-books and software would
enjoy zero tariffs.
·
Mexico must raise its duty threshold on businesses that ship
across the border from $50 to $100. Lower amounts by U.S. companies would
not be subject to fees.
·
The trade rules regarding the origin of steel, glass, optical
fiber and chemicals would be consistent with auto tariffs.
The details included in a renewed trade deal with Mexico are
likely to encourage manufacturing growth and ramp up wages. Mexico has been
criticized for exploiting low-wage workers to drain American jobs. But the
elements that clamp down on goods not produced in North America spell bad news
for Chinese aggression.
U.S.-Mexico Deal Heaps Pressure
on China
The Chinese hierarchy have
been reportedly divided about how to handle the escalating trade war with the
United States. News of a deal with Mexico that closes backdoors to made in China goods provides Pres.
Trump an even stronger negotiating posture.
Economic experts following the very limited talks between the
world’s two largest economies point to a strong difference in trade philosophy.
China reportedly favors structural changes to the trade imbalance. Pres. Trump
wants determined policies that balance trade in terms of real dollars.
“I suspect that (Pres.
Trump) will hold out on negotiating a settlement with China for the time being.
I suspect it could even run through the mid-term elections in November,” Asia
Pacific investment officer at Credit
Suisse John Woods reportedly said.
Economists around the world expect the Trump Administration to
dig in as another $200 billion in tariffs hits Chinese goods during September.
The U.S. Treasury has already reaped billions in revenue since the trade spat
began and are prepared to offset any farmer losses due to retaliation by
rerouting the revenue.
Norb Leahy, Dunwoody
GA Tea Party Leader
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