Trump Announces Trade Negotiations/Agreements Picking Up Steam
President Donald Trump managed to hold a nearly hour-long press conference on trade agreements at the White House Monday, before allowing reporters to switch to questions on his Supreme Court nominee. The pace of U.S. negotiations of new trade agreements, replacing the unfortunate NAFTA and the failed Trans-Pacific Trade Partnership of previous administrations, is clearly accelerating.
The President's immediate announcement concerned the U.S.-Mexico-Canada Agreement (USMCA), which he called "a new deal to terminate and replace the NAFTA Agreement," and "the biggest trade deal in American history," affecting $2.4 trillion in trade and 1.4 million American jobs. Actually, Canada is agreeing to join the previously negotiated U.S.-Mexico agreement, which promises — if approved by Congress and the other parliaments — to increase auto and industrial employment in the United States, and improve wages and labor conditions in the Mexican auto sector. The new U.S.-Canada agreements as such are of minor significance — including a possible sunsetting after six years of the Investor-State Dispute Resolution Mechanism attacked by labor and fair-trade advocates, and a small (3.5%) additional "opening" of the Canadian dairy products markets.
The primary benefit, is that the inclusion of Canada in the agreement wins the GOP's votes in Congress for the much more substantive Mexico-U.S. side of the agreement. As to Democrats, both they and labor leaders like AFL-CIO President Richard Trumka were extremely cautious about even appearing to welcome the deal: "Too many details still need to be worked out before working people make a final judgment on a deal" [trumka]. Richard Neal (D-MA) slyly called it "a new NAFTA", a derogatory branding.
The South Korea-U.S. (KORUS) trade agreement signed six days ago appears to have one clear result: To lower Korean steel exports to the United States. The level agreed to is 70% of what those exports were in 2016, which was 2.9 million tonnes or $2.2 billion; that level was steady in 2017, and has declined in 2018 due to new U.S. tariffs; but not by 30%. So, here is further aid to U.S. steel production and employment; South Korea was the second-leading exporter of steel to the United States behind Canada, although a lot of both is said to have been Canadian and Korean companies' re-exporting steel produced in China.
Trump also told the conference that new trade negotiations are underway with Japan, having been initiated three weeks ago, he said, by Japanese Prime Minister Shinzo Abe. He said that Abe had told him at that time, that more Japanese automotive production will be moving to America. Negotiations are initiated at a low level with India, and may progress quickly.
On China, the President claimed its economy was in difficulty — which "I don't want" — and said, "They want to talk; I don't think it's time to talk yet. We want them to keep helping us with North Korea." His usual strong praises of Chinese President Xi Jinping were not in evidence, although he said that Xi is aware of the policy changes he, Trump, is trying to push, "because he's a pro, and I'm a pro."
China on Sept. 29 actually cut its tariffs on more than 1500 products, facilitating machinery imports. This was said to bring China's "average tariff" on all imports down to 7.8% from 9.8%; the U.S. "average tariff" during Trump's presidency has risen from 2% to 8.2%, according to Bloomberg Global Data.