Trump puts USA food, farm companies on edge over Mexico trade
Feb 04 2017 by Harriet Stone
U.S. President Donald Trump reiterated his concerns about the North American Free Trade Agreement (NAFTA) deal on Thursday and said he would like to speed up talks to either renegotiate or replace the deal.
If Trump starts a trade war, all the NAFTA countries will be losers, even if he - through his incendiary and distorted rhetoric - is a political victor.
And now Trump seems focused on doing some of the other things he said he would do, like renegotiating the North American Free Trade Agreement and trying to come up with a way to force Mexico to pay for a wall along the border.
Like a lot of Midlands farmers, Randy Uhrmacher gets a little nervous when he hears in the news about President Donald Trump looking to shake up free trade agreements.
European Union and Mexico trade chiefs have agreed to hold negotiations on April 3-7 and June 26-29.
"We have opportunities with everyone", he said.
But he said the political moment points to a multi-deal approach.
He has turned the country's back on what amounted to 40 percent of world trade comprised of 12 nations throughout the Americas, Asia and the South Pacific.
The U.S. president said Thursday that his commerce secretary will be involved in negotiations, that he'll move as quickly as possible under legal guidelines and that he's not sure what form a new NAFTA will take. This agreement would require a 6 to 30 percent tariff duty on USA exports to Mexico, depending on the good, and Mexican exports to the US would require roughly a 2 to 5 percent tariff duty.
Prominent Mexican politicians, including former President Felipe Calderon, have said the nation should consider ending purchases of US corn if Trump applies new taxes on Mexican exports. But President Donald Trump has thrown traditional USA trade policy into a state of turbulence. He also added that he does not care whether it is a "renovation" of NAFTA or a "brand new NAFTA". But much of the trade going north is actually intra-company trade, so hypothetically it'd also get more expensive for Ford to manufacture a auto or Caterpillar to make tractor parts.
Perhaps equally surprising is that in terms of merchandise trade, Mexico is far more integrated into global markets than is the USA -by more than twice as much: Mexico's exports account for 37% of its GDP, and its imports constitute 36% of its GDP; the corresponding figures for the US are 13% and 16%, respectively. He said speculation on whether the NAFTA rewrite would be submitted to Congress for a vote was "way premature".
There is a widespread assumption in Canada and the USA that Mexico has been the biggest victor from NAFTA.
For quite some time, harsh criticism of NAFTA was largely taken up by progressives and leftists, making Trump's position even more freakish to those familiar with the debate.
His White House says it intends to pursue bilateral deals with foreign countries with which it doesn't have standing agreements. Ross did not commit an answer.
"Ultimately, major shifts in policy are decisions that should made with the consultation of Congress which, under the U.S. Constitution, has authority over tariffs", he said.
Trump "agrees that we need to buy American and we need to sell American and make these agreements more fair", Brady said.
"Tough, but fair", is how Eric Miller, the former official, who now advises clients for the Rideau Potomac Strategy Group, described Ross.