Saturday, June 23, 2018
Politics

Trump wants new NAFTA deal to cut trade deficit with Mexico

WASHINGTON — President Donald Trump vowed Monday to boost U.S. manufacturing by cutting the $64 billion trade deficit with Mexico as he showcased products made in all 50 states — everything from a fire truck to a baseball bat.

"No longer are we going to allow other countries to break the rules, to steal our jobs and drain our wealth," Trump said at a White House event that spilled from the East Room to the South Lawn.

Shortly after Trump's remarks, the U.S. trade representative released an 18-page report about its goals for updating the decades-old North American Free Trade Agreement with Canada and Mexico. In addition to reducing the trade deficit, the administration wants to insert a chapter on the digital economy into the deal. It also wants to strengthen labor and environmental obligations, as well as amending the rules of origin so that more of the products traded come from the United States and North America.

Turning their focus to trade this week, administration officials are to meet Wednesday with economic officials from China, a nation the president has accused of dumping steel on the global market to hurt U.S. steelmakers.

The president took his time checking out products from all over the country: Trump donned a cowboy hat from Texas. He swung a baseball bat from Louisiana. And he even climbed into the cab of a Wisconsin-built fire truck and pretended to be a firefighter, saying, "Where's the fire? Where's the fire? Put it out fast!"

The new NAFTA objectives, a requirement to begin talks on updating the agreement in the next 30 days, contain the first specifics for a Trump administration that has made bold promises on trade. Trump has pledged to recover factory jobs and boost wages by crafting new trade deals. Supporters note that NAFTA enabled companies to charge cheaper prices for products that range from cars to vacuum cleaners, helping many U.S. consumers.

The president said he only seeks a level playing field for U.S. companies and workers, but "if the playing field was slanted a little bit toward us, I would accept that, also."

But the president has a conflicted relationship with global trade. His namesake clothing business depended on the work of low-wage workers living overseas, as does the fashion line of his daughter and White House aide, Ivanka Trump.

Trump has blasted trade deficits as hampering the economy by sending money abroad. But the trade deficit has actually improved from $762 billion in 2006 to $505 billion last year, a change brought about largely because U.S. consumers cut back spending during the Great Recession. His administration already is pursuing multiple trade cases on individual products and is weighing whether to impose tariffs and quotas on foreign steel in hopes of curbing production in China, even though that country represents a fraction of U.S. steel imports.

When NAFTA went into effect in 1994, the United States ran a small trade surplus in goods with Mexico and a slight deficit with Canada. But the size of the deficits steadily began to increase afterward.

By last year, the United States ran a $64 billion trade deficit with Mexico and a nearly $11 billion gap with Canada.

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