Listen and subscribe to the Hashing it Out podcast on your mobile device:
On Apple Podcasts | On Spotify | On Stitcher | On Google Play | On YouTube
President Trump put the icing on the cake by signing the United States-Mexico-Canada Agreement into law on Wednesday, replacing the North American Free Trade Agreement. Between the USMCA and signing the first phase of a trade deal with China, the president has had two enormous wins in as many weeks.
In a sit-down with the Washington Examiner’s Hashing it Out podcast, Sen. Kevin Cramer, a North Dakota Republican, said that even though he’s a free market capitalist, Trump’s trade strategy turned him into a believer.
“The Chinese economy is greatly dependent on the United States,” Cramer said. “The president has always understood this. I think for those of us who come from this free market capitalist society as we do and as we have and we believe it’s the most exceptional and best. But he’s demonstrated that when free marketers are negotiating with the totalitarians, the totalitarians tend to have all the leverage. They do the subsidies. Their government manipulates the markets. And so now, he’s used the power of tariffs to sort of fight back with that. And he’s demonstrated that it actually can work. I mean, I’m a convert!”
Despite signing the first phase of a trade deal with China, the U.S. still imposes 7.5% tariffs on $120 billion worth of Chinese goods and 25% tariffs on an additional $250 billion worth of products. The main hurdle now is ensuring that the Chinese make good on their pledge to purchase between $40 billion and $50 billion in U.S. farm goods and negotiating the second phase of the trade deal.
Meanwhile, on the USMCA, with Trump signing the deal on Wednesday, Canada remains the only nation in the trilateral agreement not to have the USMCA ratified. And with Canadian Prime Minister Justin Trudeau attempting to form a minority government, there’s been a lot of foot-dragging.
Cramer told Hashing it Out he feels confident that Canada can make it past the finish line.
“Canada cannot afford to not have the USMCA done,” Cramer explained. “And they certainly can’t afford for there to be a major breakdown of some sort that would damage the relationship. Canada is important to U.S. trade, but the United States is critical to Canada’s economy.”
In addition to fixing America’s broken immigration system, Trump made trade a key campaign issue during the 2016 election. While Trump is far from satisfied, he can at least pad his resume to voters that he has a strong record on the economy in the upcoming 2020 election.
