Donald Trump has held any number of positions on just about everything — abortion, single-payer health care, even illegal immigration. Now governing as a rock-ribbed conservative, Mr. Trump took a circuitous path to his current ideological home.
There’s one profound exception to this. Trade. Since the 1980s, the president has railed against what he says are trade deals that badly damaged the United States. In this, Mr. Trump has been nothing if not consistent.
He bemoans the state of trade with China, trade with Japan, and trade with the European Union. He takes particular exception to the North American Free Trade Agreement (NAFTA), a sprawling pact which took effect in January 1994, signed by Canada, Mexico and of course the United States. The three countries trade more than $1 trillion worth of goods each year.
President Trump despises NAFTA, calling it, with his characteristic subtlety, one of the “worst” trade deals in history. The president’s voters hate NAFTA too, and it was his opposition to it, along with scorn for illegal immigration and his promise to do something about it that propelled him to victory in the Republican primaries.
Mr. Trump looks at the abandoned factories across the heartland of America and, not without justification, points the finger at NAFTA. Studies suggest that nearly a million manufacturing jobs have been lost since the implementation of NAFTA. General Electric, Chrysler, and Caterpillar are prominent among the American companies that bolted south of the border after NAFTA was enacted. And not just the jobs; U.S. manufacturing wages have shrunk, too.
To a patriotic American president, the picture is crystal clear. Mexican factories are booming, in the automobile industry in particular. The Mexican car industry is going gangbusters while the American automobile industry has shrunk markedly over the past two and a half decades. Heavily unionized states like Michigan particularly suffered. Indeed, the United States currently suffers from a $69 billion trade deficit with Mexico, and cars make up most of that.
Since taking office last year, President Trump has made it a priority to renegotiate the terms of NAFTA. Earlier this week he appeared to have succeeded. Monday was “a big day for trade a big day for our country,” the president said from the Oval Office. He announced several important revisions of U.S.-Mexican trade relations, with a sharp focus on the automobile industry.
One new provision mandates that 40 to 45 percent of North American automobile components be manufactured by workers earning at least $16 an hour. This will plainly help the American companies, as the biggest attraction south of the border is the paltry pay Mexican workers expect. The $16 an hour paid to American workers is three times the $5.30 paid to Mexicans earning the minimum wage.
Another new rule will ensure that 75 percent of automobile parts for North American-manufactured goods be made in Mexico and the United States or suffer tariffs, up from 62.5 percent. The deal includes data protection rules. “It’s an incredible deal for the workers and for the citizens of both countries,” President Trump said. Mexican President Enrique Nena Pieto, with whom the president has had a rocky relationship, praises the agreement as well. “I think this is something very positive for the United States and Mexico,” he says. He wants to “renew [NAFTA], to modernize it, to update it, and to generate a framework that will boost and potentiate productivity in North America.” That work ahead will fall to a new president, the leftist Andres Manuel Lopez Obrador, who will be sworn in on December 1.
Canada, by choice, did not participate in this latest bilateral negotiation between Mexico and the United States. A deadline of the end of this week has been set for newly negotiated relations between the United States and its northern neighbor. “[Canada] wants to be part of the deal, and we gave until Friday and I think we’re probably on track,” President Trump says. “We’ll see what happens, but in any event, things are working out very well.” The Canadian leader, Justin Trudeau, expressed similar optimism that a deal can be completed. The vague and ubiquitous “they” said it couldn’t be done, but a deal looks on the way.
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