Trump administration trade talks with China remain in limbo and negotiations with the European Union have flatlined. Now Trump’s new NAFTA trade agreement is faltering in Congress. The absence of agreements and the continuation of tariffs are piling more stress on manufacturers and farmers.
No one expected trade talks with China would be a cake walk. Bruised relationships with European political leaders may contribute to stalled negotiations with the EU over agricultural products. But Trump trumpeted his success in maneuvering Mexico and China into a trade deal only to see the agreement flounder amid bipartisan complaints.
The early onset of the 2020 presidential election only complicates the situation with trade policies morphing into trade politics.
Trump’s protectionism has begun to chafe with traditionally free-trade Republicans, many of whom represent agricultural interests that are paying the price of a trade war with lost sales and the prospect of lost markets.
Republican Senate Finance Chair Charles Grassley has flatly told Trump he won’t move the new NAFTA trade deal until Trump lifts steel and aluminum tariffs on Mexico and Canada. Canada has strongly objected to the continuing tariffs, which has become an issue in its upcoming elections. Trump trade officials believe Chinese steel producers are evading the tariffs by shipping through Mexico.
“The tariffs are going to come off because the president has a good agreement,” Grassley told The Washington Post. “It’s just a matter of his realizing that nothing’s going to happen until the tariffs go off. And so the tariffs come off if he wants to get a win.” Grassley said Trump has refused because he feels the tariffs have revived the domestic steel industry and is insisting on quotas as a fallback when tariffs are lifted.
The AFL-CIO has refused to endorse the trade agreement until the Mexican parliament approves promised labor reforms. House Democrats aren’t on board, either. Speaker Nancy Pelosi said she won’t put the agreement on the House floor until she sees proof of tougher, effective enforcement provisions.
Liberal Democrats say the deal is a nonstarter because of provisions they say codify exclusive 10-year rights to biologics, which they view as a “total giveaway to Big Pharma.”
Trump officials remain optimistic. Treasury Secretary Steven Mnuchin posed for pictures late last week after a bargaining session with his Chinese counterparts that he deemed “productive,” even as several deadlines have come and gone. The International Trade Commission’s analysis of new NAFTA won’t be completed until mid-April, which starts the congressional clock on approval.
However, negotiations face a political clock as leading Democratic presidential contenders oppose the new NAFTA, heartland farmers grow restive as they see hard-earned global markets evaporate, the US economy begins to show signs of stalling and trade deficits keep climbing.