Strike a Deal

The U.S. and Mexico negotiated a bilateral deal on trade yesterday.  I’m highly skeptical that the liberal media will have anything positive to say in response.  In fact the headline in nearly all the major outlets was about the awkward voice call between the President Nieto of Mexico and President Trump.  The media’s hatred for Trump will not allow them to give credit where credit is due.  The media was highly critical of the high-stakes gamble the President was playing by imposing tariffs on imports.  As President Trump stated on numerous occasions, we were being taken advantage of by other nations.  Protectionist policies that are in place in other countries, including our closest neighbors, limit the ability for American products to gain inroads.  All the President was asking is that we start with a level playing field.  America is the greatest economic power in the world thanks to our work ethic and competitiveness.  President Trump had no sooner hung up the phone when the stock market shot up to new highs.  The agreement was especially beneficial for American auto makers and farmers.  The agreement requires that 75% of auto content be manufactured in North America.  At this point that would be the U.S. or Mexico.  That aspect of the deal would benefit workers in both Mexico and the U.S. since some auto parts are currently made in China.  Additionally 40-45% of the vehicle must be made by workers earning at least $16/hr.  That would be a significant boost for Mexican workers who are currently paid much less than that.  If Mexican workers are paid more, that would be a disincentive to moving auto plants to Mexico and would also discourage Mexican workers from migrating to the U.S. in search of a better paying job.  The deal is also believed to be a plus for U.S. farmers by opening up Mexican markets to more American farm products.

The President of Mexico (and others) is encouraging the inclusion of Canada in the trade negotiations.  Premier Justin Trudeau himself has taken a tough stance toward protecting Canadian industries.  They have imposed heavy tariffs on dairy products and have subsidized their lumber and steel industries.  Canadian steel exports primarily are sent to the U.S. with us receiving 80% of their steel exports in the past.  Thus far in 2018 we have been on the receiving end of 91% of their steel exports, approximately 1.6 million metric tons.  When President Trump attacked steel imports he was aiming primarily at China who dumps cheap steel in the U.S.  He was also addressing Canadian steel dumping as well.  Premier Trudeau must change his belligerent attitude if he expects to renegotiate the NAFTA treaty with the U.S. and Mexico.  Despite the media’s constant criticism, President Trump is looking out for the best interests of America.  I can only imagine what he could accomplish if he had the support of the Dems and media.  He is swimming against a strong tide yet still making progress and keeping his promises.

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