USMCA: A Free Trade Trifecta
As a candidate for president, Donald Trump had at least one thing in common with President Barack Obama: Both leaders promised to renegotiate the North American Free Trade Agreement (NAFTA) to get a better deal for American workers. However, only President Trump kept his promise.
The signing of the United States-Mexico-Canada Agreement (USMCA) to replace the long-standing NAFTA accord is a step forward toward a freer, fairer trade system between America’s trading allies. The USMCA offers American workers a superior deal that will level the international “playing field” and boost economic growth at home. What’s more, the Trump administration has an opportunity to vastly amplify the economic benefits of the pending agreement by exempting Canada and Mexico from recently imposed steel and aluminum tariffs.
Such swift and decisive action will send a signal to the world that the United States is “open for business” and committed to free trade with our friends. By lifting these tariffs, the administration will broaden its commitment to protect American workers and advance free trade — not just in the United States, but around the globe.
Despite being derided by political rivals and a hostile media, President Trump has made reinvigoration of America’s manufacturing sector a core tenet of his economic policy. For decades, under the policies of both parties, American manufacturing jobs were shipped overseas as the weight of staggering regulations and governmental policies made it difficult to build in America.
Parts of cities like Detroit, Michigan, and Gary, Indiana, transformed from bustling economic centers into ghost towns reminiscent of bombed out German cities from World War II. The economic effects were devastating, but the destruction also had a more personal toll. Poverty, drug abuse, and suicide became rampant in these communities as life expectancy began a steady decline.
The trade agreement with Canada and Mexico is a critical breakthrough in President Trump’s battle to turn things around.
Exempting Canada and Mexico from steel and aluminum tariffs will incentivize these nations to continue working with the White House on its agenda, all while relieving financial pressure on American manufacturers who depend on these critical materials. More, these exemptions will provide relief for other industries whacked by retaliatory tariffs. From automobile manufacturers to beermakers, millions of workers will benefit while the American economy continues to expand.
To force trading partners and adversaries alike to the negotiating table, President Trump has imposed tariffs on goods made abroad. In many cases, the tactic has worked. When Mr. Trump imposed tariffs on goods from the European Union (EU), they quickly reached an agreement that benefited American soybean farmers and the natural gas industry. Both sides pledged to return to the negotiating table to work toward a goal of "zero tariffs, zero barriers, and zero subsidies on non-auto industrial goods."
As in the case of the EU, aluminum and steel tariffs with our trading partners should now be lifted as not only a sign of goodwill, but the next step toward a true free trade zone in North America.
From cars to beer cans, America’s manufacturers depend on steel and aluminum to build. Canada, in particular, is part of a critical alliance with the U.S. to produce military equipment for our shared national security. Absolutely, and perhaps most significantly, our military depends on aluminum and steel to defend the nation. Since World War II — for more than seventy years — American tanks, planes, and ships have been built with aluminum produced by our allies like Canada. Tariffs and trade barriers hurt the American economy, stifle opportunities for workers, and threaten U.S. military readiness. Exempting Canada and Mexico from these tariffs is good policy, and necessary for a wholly successful agreement.
President Trump has on multiple occasions argued that tariffs are a tool to move toward freer, fairer trade. He has used tariffs as leverage to get a better deal for the American worker.
With USCMA, the Trump administration has been successful in forging a fairer and better alliance with Canada and Mexico. By lifting tariffs on Mexico and Canada, President Trump now has the ability to turbo-charge the agreement, and in so doing help the American economy, hardworking taxpayers and workers, and our Armed Forces — a free trade trifecta.
Jerry Rogers is the founder of Capitol Allies, and the co-host of The LangerCast on the RELM Network. Twitter: @CapitolAllies.