At the last possible moment, Trump made a deal with Canada. NAFTA is gone USMCA is in but details lacking.
Goodbye NAFTA. Hello USMCA. It’s the “single greatest agreement ever signed”.
What did it do?
There are two ways to look at things.
Curiously, both viewpoints are accurate.
In regards to point number one, Trump threatened to put 25% on all cars and parts from Mexico and Canada. Had Canada not signed, the stand-alone deal with Mexico would likely not have passed Congress.
In regards to point number two, the most significant aspect is that Trump will not follow through with his threat to put a 25% tariff on cars from Canada and Mexico. In other words, we are basically where we were before Trump verbally blasted Canada and Mexico.
Will Congress Approve?
CNN asks Will Congress Approve?
“I plan to sign the agreement by the end of November. I then will submit it for approval to Congress where, in theory, there should be no trouble — but anything you submit to Congress is trouble, no matter what”, Trump said. “It’s the single greatest agreement ever signed but they’ll say, ‘Well, Trump likes it, therefore we’re not going to approve it because that’ll be good for the Republicans, so therefore we can’t approve it'”.
The problem is obvious. We do not know the makeup of the next Senate.
I expect passage, but Democrats are out for blood.
What’s In USMCA?
The U.S.-Mexico-Canada Agreement eases uncertainty about the Trump administration’s trade policies, helping automakers move forward with factory investments.
The WSJ reports New Trade Pact Spares U.S. Auto Makers From Tariffs but Adds Restrictions.
The tentative pact, which still must be approved by Congress, spares auto makers from costly tariffs on cars imported from Canada and Mexico, a major relief for an industry that has for more than two decades relied on duty-free trade to expand operations in North America. But the new rules could also force car companies and their parts makers to alter their supply chains, potentially increasing costs at time when profits are already under pressure from slowing new-car sales in the U.S., industry officials and consultants say.
