I watched the video of the President's post USMCA agreement press conference, where President Trump presented his version of the new trade agreement with Mexico and Canada.
It really is interesting to watch the president switch between reading his official speech text and ad-lib asides, between the "facts" and the "values." Is it a mistake or is it genius? Who knows?
All along, I have wondered if this new NAFTA was real substantive policy change or just atmospherics, good old bubba bait. So I went to the USTR handout.
Of course it is a long bureaucratic doodad, under the following major headings:
There is also a provision to allow the US to intervene in trade agreements between Canada/Mexico and third-party countries. That is to stop the current scam where China gets to export products to Canada, do minimum value-adding, and then re-export to the US. That, I had understood, was the big issue with NAFTA, that it allowed, say, China, to have big tariffs on US exports to China, while getting China exports into the US with little of no tariffs because, hey, what could the US say about trade between, e.g., China and Canada?
It was interesting to watch President Trump, and the overall impression he gives of his trade strategy. Basically, it seems to be to raise tariffs to get peoples' attention. Then we negotiate. Another interesting meme: Trump said that his guys would go to, e.g., India, where they charge 100% tariffs on Harley-Davidson motorcycles, and the Indian officials would be amazed. Nobody ever came and talked to us before, they said.
I suppose that the way to explain this is that the previous ruling-class policy was to avoid bilateral agreements and instead use multilateral agreements through the WTO and the TPP, Trans-Pacific Partnership. So you pass the agreement and leave it to the bureaucrats. Obviously, Trump prefers his one-on-one Art of the Deal approach, and it probably works well for him.
But will the new USMCA make a real difference? We shall see. Obviously the optics are that Trump cares for American workers, and judging by the turnout at Trump's rallies, the optics are working.
It really is interesting to watch the president switch between reading his official speech text and ad-lib asides, between the "facts" and the "values." Is it a mistake or is it genius? Who knows?
All along, I have wondered if this new NAFTA was real substantive policy change or just atmospherics, good old bubba bait. So I went to the USTR handout.
Of course it is a long bureaucratic doodad, under the following major headings:
- Intellectual property, including drugs and copyright.
- Digital Trade, prohibiting customs duties on digital products distributed electronically (e-books, videos, music, software, games, etc.
- De Minimis, which means waiving bureaucratic flim-flam on small-value shipments.
- Financial Services, making sure that US financial services guys get the same treatment as the locals.
- Currency, discouraging exchange-rate shenanigans.
- Labor, including "rules of origin to drive higher wages by requiring that 40-45 percent of auto content be made by workers earning at least USD $16 per hour."
- Environment, "to combat [naughty] trafficking in wildlife, timber, and fish; ... and to address pressing environmental issues such as air quality and marine litter."
There is also a provision to allow the US to intervene in trade agreements between Canada/Mexico and third-party countries. That is to stop the current scam where China gets to export products to Canada, do minimum value-adding, and then re-export to the US. That, I had understood, was the big issue with NAFTA, that it allowed, say, China, to have big tariffs on US exports to China, while getting China exports into the US with little of no tariffs because, hey, what could the US say about trade between, e.g., China and Canada?
It was interesting to watch President Trump, and the overall impression he gives of his trade strategy. Basically, it seems to be to raise tariffs to get peoples' attention. Then we negotiate. Another interesting meme: Trump said that his guys would go to, e.g., India, where they charge 100% tariffs on Harley-Davidson motorcycles, and the Indian officials would be amazed. Nobody ever came and talked to us before, they said.
I suppose that the way to explain this is that the previous ruling-class policy was to avoid bilateral agreements and instead use multilateral agreements through the WTO and the TPP, Trans-Pacific Partnership. So you pass the agreement and leave it to the bureaucrats. Obviously, Trump prefers his one-on-one Art of the Deal approach, and it probably works well for him.
But will the new USMCA make a real difference? We shall see. Obviously the optics are that Trump cares for American workers, and judging by the turnout at Trump's rallies, the optics are working.
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