Donald Dossier: NAFTA, Better Known as Trump's Midterm Boost
WHY YOU SHOULD CARE
President Trump struck a deal with Canada that may prove more politically consequential than Kavanaugh.
By Daniel Malloy and Sean Culligan
So much of Donald Trump’s political rhetoric has centered on America’s southern border, where he has cracked down on immigrants and pledged a big, beautiful wall that his supporters are still waiting on. But the road to success in the midterm elections may well run along the world’s longest border between two countries — the U.S.-Canada divide.
A handful of competitive House races and two pivotal Senate contests touch the border. Monday’s announcement of a new don’t-call-it-NAFTA trade deal with Canada and Mexico may yet prove to be the week’s most politically consequential moment.
Yes, the dramatic installation of Brett Kavanaugh on the Supreme Court will shape American law for decades and has, for now, awakened an own-the-libs backlash to how Democrats handled sexual assault allegations against the judge during his confirmation hearings. But by Election Day, the culture wars will have fresh kindling. Meanwhile, the USMCA (short for United States Mexico Canada Agreement, a silly rebranding that few will use) hits important voters in the pocketbook.
In striking a deal at last with Canadian Prime Minister Justin Trudeau despite their frosty relationship, Trump’s success comes in part because of what didn’t happen: a full withdrawal from NAFTA, grinding supply chains to a halt. “That strikes me as the arsonist taking credit for not burning down your house,” quipped Scott Lincicome, a scholar at the libertarian Cato Institute, to National Public Radio, and he’s got a point. Aspects of the deal — which likely goes before Congress next year for ratification — that touch on intellectual property and digital trade mirror the Trans-Pacific Partnership pact that Trump chucked out the window upon taking office, so much of this is status quo from President Barack Obama.
But because Trump seemed willing to shoot the hostage and kill what he’s called “perhaps the worst trade deal ever made,” he was able to wring key concessions for U.S. workers in the auto industry. By late in the week, executives from BMW and Daimler AG told reporters they were considering relocating more production to North America because of the new deal, with The Wall Street Journal reporting that more automakers were likely to follow. The result may well be more expensive cars — the deal requires more cars to be made with higher priced labor — but Trump’s trade ethos is that employing more Americans in key industries is worth the cost trade-offs.
The economy continues to go gangbusters, with unemployment now reaching its lowest level since 1969 at 3.7 percent. But those gains remain unevenly distributed, just as they were under Obama when the “forgotten men and women” Trump often spoke to were drawn toward a disruptive presidential candidate. Health care costs are still rising faster than wages.
Trump’s multifront trade war has made much of his own party wary. In critical states such as Missouri and North Dakota, Republican Senate candidates had to tiptoe around trade. Now, they can point to a benefit — and a potential end game to Trump’s economic escalations with China that have rocked farm states.
The president, thus, is further emboldened to take on the European Union, China and whoever else. “By the way, without tariffs, we wouldn’t be talking about a deal, just for those babies out there that keep talking about tariffs — that includes Congress,” Trump said in the Rose Garden on Monday, willing as always to play the rhetorical arsonist.