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  1. #1
    Senior Member Judy's Avatar
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    Trump weighs canceling NAFTA to force hand of Democrats on trade

    Trump weighs canceling NAFTA to force hand of Democrats on trade

    by Colin Wilhelm
    December 28, 2018 12:00 AM

    President Trump and his advisers are weighing whether to cancel the North American Free Trade Agreement to force through his revised trade deal, a strong-arm tactic that would present Congress — and resistant Democrats — with the stark choice of assent or disarray.

    Two administration sources who asked for anonymity to speak freely with the press said that the idea has been discussed within the White House but that they did not think that Trump has reached a final decision to withdraw from NAFTA.

    “As crazy as it sounds, you’ve got to have some kind of catalyst to get things to move,” said one of the White House staffers, emphasizing that administration staff would prefer to negotiate over Trump's deal, the U.S.-Mexico-Canada Agreement or USMCA, without first removing the safety net of NAFTA.

    Former senior administration officials and trade groups view Trump removing the U.S. from the nearly 25 year-old trade agreement early next year as an increasing likelihood.

    “It could be that he withdraws [from NAFTA] before [USMCA ratification] even reaches Congress,” said Marc Short, former White House director of legislative affairs. “I think there’s a high probability of that, yes.”

    The discussions about canceling NAFTA follow Trump's previous statement that he intends to do it. In extemporaneous remarks to reporters on Air Force One en route back from Argentina earlier this month, Trump said that NAFTA has "been a disaster for the United States" and that he would "get rid of it."

    The logic of withdrawing from NAFTA before the USMCA would be to pressure Congress to approve Trump’s trade deal and any laws needed to comply with it. By formally withdrawing from NAFTA, Trump would set a hard deadline of six months for Congress to approve the USMCA or face having tariffs reintroduced on substantial portions of the approximately $1.3 trillion worth of trade between the U.S., Canada, and Mexico.

    "Congress will have a choice of the USMCA or pre-NAFTA, which worked very well," Trump said.

    Trump did not provide a specific timeline to reporters in that interview. White House sources were unsure of when exactly the administration would send specific bills and the USMCA itself to Congress. But White House officials view 2019 as the timeline to wrap the trade deal, fearing Democrats could drag it out otherwise once the presidential campaign officially starts in 2020.

    Canceling NAFTA would set up a showdown similar in political dynamics to the current partial government shutdown, but with international supply chains for U.S. companies and the health of the stock markets in the balance. On the other hand, implementing USMCA would provide Trump a policy win that he could tout as fulfilling a promise he made on the campaign trail.

    “We are very confident that Congress will approve USMCA,” said Emily Davis, a spokesperson for the U.S. Trade Representative, in a statement provided by the White House press office. “From the beginning, Ambassador Lighthizer has worked closely with Democrats and Republicans in the House and Senate on the renegotiation of this agreement.”

    Trump may already feel he has the upper hand in the negotiation, and has shown a willingness in his shutdown fight to push the envelope to pursue his other major campaign objective, namely completing a wall between the U.S. and Mexico.

    “Personally I could see the case for it because it puts it on the dual track for Congress to choose between USMCA ... or pre-NAFTA,” said Stephen Pavlick, a former deputy assistant secretary at the Trump Treasury Department. “I don’t think he sees the Democrats as having much leverage here. And candidly I think they see that too.”

    “Do [Democrats] really want to be responsible for blowing up NAFTA?” Pavlick asked.

    A NAFTA withdrawal could intensify already tricky politics for Democrats around the USMCA. A number of labor unions oppose free trade agreements, including NAFTA and the USMCA, for fear their members could be displaced by them. Though the USMCA closely follows much of NAFTA’s language, and includes language to increase pay for workers in Mexico, unions — and Democrats closely allied with organized labor — so far don’t see it as enough.

    “It doesn’t satisfy anybody in the labor movement, it doesn’t satisfy any Democrats,” Sen. Sherrod Brown, D-Ohio, told the Washington Examiner. “We have told them for months that they have to have strong labor chapter enforcement and they didn’t.”

    One risk for Trump, though, is that Democrats could call his bluff on NAFTA cancellation and refuse to back USMCA even in the absence of NAFTA on the grounds that Trump would own the political and economic fallout.

    “I’m not pulling out of NAFTA. I can’t make that judgment,” said Brown, a potential 2020 presidential contender. “If the president’s going to throw a temper tantrum and pull out that’s on him.”

    Reverting to the pre-NAFTA situation would damage the economy and the stock markets, imperiling Trump's goal of growth. A withdrawal from NAFTA without a replacement would restore tariffs that were eliminated in the 1990s, requiring major supply chain reorganizations from companies that have grown accustomed to freer cross-border commerce.

    “Any attempt to revoke NAFTA without an operational USMCA would represent a whole new risk that would weigh on investor sentiment like concrete boots,” said Isaac Boltansky, director of policy research at Compass Point Research and Trading, in an email. “Investors are so fixated on the Federal Reserve, China, and economic growth that any strategy predicated on revoking NAFTA without its replacement in place would alarm markets and catalyze a whole new leg downward.”

    https://www.washingtonexaminer.com/p...crats-on-trade
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    Senior Member Judy's Avatar
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    Oh hell yes, do it now. Terminate NAFTA now. Do it right now. Immediately. Start that 6 month clock for pre-NAFTA tariffs immediately.

    Now THAT'S a fight you can win, because there is no way to lose.

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    Trump’s Broken Nafta Promise

    The U.S. still hasn’t lifted metals tariffs on Canada and Mexico.


    By The Editorial Board

    Dec. 26, 2018 7:26 p.m. ET


    An employee monitors the packing of Wavemaker Amber Ale at Big Storm Brewing Company’s brewing facility in Clearwater, Florida, March 13. PHOTO: DOUGLAS R. CLIFFORD/ZUMA PRESS


    When President Trump signed his new Nafta accord last month with the leaders of Mexico and Canada, Prime Minister Justin Trudeau almost didn’t show up. The reason: Mr. Trump still hasn’t lifted the steel and aluminum tariffs as he promised he’d do if America’s two neighbors signed a revised trade deal.

    A month later they’re still waiting. The delay is damaging the U.S. economy and America’s credibility as a trading partner. Though Mr. Trump likes to use tariff threats as a negotiating tactic, his Administration also promised relief from the levies he imposed under Section 232 of U.S. trade law.


    Commerce Secretary Wilbur Ross told Congress in June that the “objective” of the metals tariffs “is to have a revitalized Nafta, a Nafta that helps America and, as part of that, the 232s would logically go away, both as it relates to Canada and as to Mexico.”

    In July U.S. Trade Representative Robert Lighthizer told a Senate hearing that “resolving the NAFTA issue—we would expect, or hope, that we would resolve the steel and the aluminum issues with both Mexico and Canada.”

    Last March no less than the President himself tweeted that “tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed.”

    Yet U.S. officials now say signing new Nafta isn’t enough. They also want Canada and Mexico to agree to new quotas on their metals exports to the U.S. before the U.S. will lift the Section 232 tariffs. This is politically managed trade that responds to lobbying in Washington, not free trade that responds to market supply and demand.


    Canada is the largest foreign supplier of steel to the U.S., with a 20% import share, so the goal of quotas would be to limit steel supply to keep prices in the U.S. high. Canada and Mexico are understandably resisting since they thought a new Nafta would mean the end of arbitrary tariffs imposed in Washington.

    Meanwhile, American steel consumers continue to suffer from the tariffs. One loser is the American beer industry, which says the tariffs amount to a $347 million tax on U.S. brewers. Beer Institute President Jim McGreevy says U.S. brewers used more than 36 billion aluminum bottles and cans last year and the tariffs “could cost the beer industry more than 20,000 jobs.”

    Hundreds of American metal fabricators are also finding it difficult to acquire the steel to compete with foreign producers. Riverdale Mills Corp., in Northbridge, Mass., makes “aquamesh,” a marine wire-mesh used in 85% of lobster traps made in North America. The company is the largest global supplier for lobster fishermen and makes 95% of the wire mesh used for oyster cultivation. It exports 45% of what it makes.

    Riverdale needs specialty steel, which CEO James Knott says the company would like to buy in the U.S. But suppliers often can’t make the high-quality grade he needs and his steel prices have doubled since January. He’s losing market share at home and abroad.

    “My foreign competitors are buying steel at half the price I’m paying, and some of them face no tariffs when [exporting] to the U.S,” he says. The company has received some exclusions, but they account for less than 3% of their steel purchases. Mr. Knott says he’s cut his workforce to 150 from 200.

    New Nafta opens a slightly larger share of the Canadian dairy market to U.S. producers. But Mexico is the largest destination for U.S. dairy exports, and American dairy farmers are getting hammered by the 25% tariff that Mexico imposed on U.S. dairy products in retaliation for the steel and aluminum tariffs. The marginal gain in Canada may not make up for the export losses to Mexico.


    “We’re not ready to celebrate,” CEO David Ahlem of Hilmar Cheese Co., based in Hilmar, Calif., said when new Nafta was announced in October. “As long as 232 retaliatory tariffs are still in place . . . we can’t enjoy the benefits of having a modernized NAFTA and be back to where we were.”

    Mr. Trump’s broken Nafta promise will make it harder to negotiate new trade deals with Europe and Asia. Other countries worry that even if they sign a new deal, Mr. Trump or some future U.S. President will roll out 232 tariffs any time there’s domestic political pressure. Congress intended 232 to be used for “national security” emergencies, not as an all-purpose trade weapon. Mr. Trump’s tariff trickery with Mexico and Canada is one more reason Congress should restrict his 232 license.

    Appeared in the December 27, 2018, print edition.

    https://www.wsj.com/articles/trumps-...le_email_share





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    Senior Member Judy's Avatar
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    LOL!! Trump never promised to lift the 232 Tariffs if the new USMCA was signed. Maybe when Congress ratifies and if we've properly rebuilt our domestic steel and aluminum industries to supply our domestic and military needs, but not one day before then. The 232 tariffs relate to China steel dumping, so even then, they won't be lifted until after we have our own industry rebuilt, Congress ratifies USMCA as well as the other nations legislatures, AND we have a new China Trade Agreement.

    Anyone who didn't understand that was spending too much time reading way outdated tweets than understanding the whole issue and the deal that was actually signed.
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    MW
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    Quote Originally Posted by Judy View Post
    LOL!! Trump never promised to lift the 232 Tariffs if the new USMCA was signed. Maybe when Congress ratifies and if we've properly rebuilt our domestic steel and aluminum industries to supply our domestic and military needs, but not one day before then. The 232 tariffs relate to China steel dumping, so even then, they won't be lifted until after we have our own industry rebuilt, Congress ratifies USMCA as well as the other nations legislatures, AND we have a new China Trade Agreement.

    Anyone who didn't understand that was spending too much time reading way outdated tweets than understanding the whole issue and the deal that was actually signed.
    Nice try.

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    Senior Member Judy's Avatar
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    What is going on? Why do you want to lift the tariffs on steel and aluminum?!! Are you a globalist who wants to import steel and aluminum tariff-free into the US to compete with our domestic industries and American Workers??!!
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    Quote Originally Posted by Judy View Post
    What is going on? Why do you want to lift the tariffs on steel and aluminum?!! Are you a globalist who wants to import steel and aluminum tariff-free into the US to compete with our domestic industries and American Workers??!!
    Again, nice try. Be critical of the article if you don't like it, don't attack the messenger with your floundering accusations.

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    Senior Member Judy's Avatar
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    Oh no you don't, you searched hard and long for that article, so of course, I'm going to give you full credit and scrutiny. Why would I not? I mean who here, wouldn't? We oppose Free Trade Treason around here. At least we used to.
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    Early morning tweets from Our President 12/28/18







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    judy.
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