Can Trump's new trade deal make it through Congress?
U.S., Canada and Mexico sign the USMCA to replace NAFTA; Sen. Pat Toomey reacts to how the deal will fare in Washington on 'Journal Editorial Report.'
He came, he saw, and he took yet another step towards Making America Great Again.
President Trump scored major successes at the G-20 summit that concluded over the weekend in Argentina. Specifically, the community of nations agreed in their official communique to “necessary reform” of the World Trade Organization, a top White House priority, and recognized the decision of the U.S. to withdraw from the Paris Climate Accord, and to still utilize “all energy sources and technologies, while protecting the environment.”
In addition, the Chinese promised to up their purchases of U.S.- made goods and to discuss other demands in exchange for postponing an expected hike in tariffs; President Xi also committed to designating the deadly drug Fentanyl as a controlled substance in China, and vowed to help with de-nuclearizing North Korea.
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It was an all-round win-win for the president, who needed one. The White House has been buffeted anew by the ongoing Mueller investigation and also by threats of further inquiries and subpoenas from Democrats who are taking control of the House in the aftermath of the midterm elections.
Moreover, Trump’s signature efforts to reboot the tepid economy – efforts which have been by any standard hugely successful – have lately collided with his trade battles with China and other countries. The still-challenging landscape for manufacturing in the U.S. was highlighted recently by GM’s announcement that it would be laying off nearly 15,000 workers.
Investors, too, have shown their concerns over Trump’s tariffs on steel and aluminum. The stock market has been volatile, worried about rising costs, Federal Reserve rate hikes, and slowing global growth.
Bottom line: the G-20 produced some good news for the president, the country and markets. Over the past several months, anti-Trump hyperventilating by the left has obscured the progress the administration has made in boosting growth, hiring and wages. People in the U.S. are better off than they were, as shown by elevated consumer confidence and robust spending. Those workers at GM in danger of losing their jobs are at least being terminated when there are, according to the JOLTS survey, more than 7 million jobs currently unfilled.
Hanging over the booming economy, though, has been the ongoing battle over trade, which some describe as a self-inflicted wound by the White House. But President Trump is correct: the international playing field is not level and it needs to be fixed.
President Trump is not intent on overthrowing the rules-based order, as critics charge; he wants to make it better.
There is no plausible reason why we charge imported European cars a tariff of only 2.5 percent, while the EU imposes a 10 percent tax on cars exported from our country. There is no excuse for the fact that Europe imposes higher tariffs than the U.S. in 17 of 22 major consumer goods categories, as Commerce Secretary Wilbur Ross argued in an op-ed last year.
Our problems with the EU pale in comparison with the damage done to our country over time by China. It is impossible to detail the many ways in which the Chinese have cheated the U.S. From demanding that our companies operating there share their trade secrets to sending scientists to spy on our universities to hacking into our corporations’ most proprietary information, Beijing has engaged in a decades-long pursuit of our intellectual property, no holds barred.
They have also used subsidies of state-owned enterprises to crush international competition and thrown up endless barriers to companies wanting to compete in China.
These are not new allegations. In 2013, the National Bureau of Asian Research published the IP Commission Report, which detailed China’s misbehavior – cheating which led them to agree with the “assessment by the Commander of the United States Cyber Command and Director of the National Security Agency, General Keith Alexander, that the ongoing theft of IP is “the greatest transfer of wealth in history.” Millions of jobs and hundreds of billions of dollars in valuable intellectual property were vanishing into China each year.
The relentless quest for technology that allowed China to climb the value chain, to rise from manufacturing t-shirts to fighter jets, has been aided and abetted by our biggest businesses, and by the World Trade Organziation. Multinational corporations have put up with Beijing’s cheating because they wanted access to China’s growing consumer market. Only recently have they become more outspoken about China’s abusive practices. The WTO has put up with it because no one demanded a change.
Until now. President Trump is not intent on overthrowing the rules-based order, as critics charge; he wants to make it better. The recent G-20 gathering was a step in the right direction. It could not have happened without the clear threat of punitive tariffs on Chinese exports. The trade skirmish has slowed China’s growth to the weakest level in a decade, damaged their currency, and rocked their stock market. Leading indicators for China’s economy are dropping, with manufacturing and exports weakening. Pressure on President Xi as he traveled to the G-20 was extreme; his leadership has recently been publicly criticized, a rare and unwelcome slap at his increasingly autocratic rule.
China cannot be trusted to follow through on its promises. But, Americans can celebrate the determination of the Trump White House to keep the pressure on. In 90 days, if Beijing prevaricates, tariffs will increase. Of that there is no doubt.
President Trump will get no credit from the liberal press for the progress being made in our trade relations. But open-minded Americans should consider this: it would have been very easy in the lead-up to the midterm elections for the White House to have announced some sort of deal with Beijing, aimed at pleasing Trump-supporting farmers who have suffered from the trade battles or business leaders who fear for their bottom lines. Such an announcement would have buoyed stock prices and helped GOP candidates tout the strong economy.
The Trump White House has instead committed itself to exposing and correcting a serious problem that has hurt American workers and businesses and should be applauded by all; I’m not holding my breath.
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