Critics warn trade deal with China leaves unresolved most of the toughest issues and the North American trade pact will make American cars more costly.
President Donald Trump’s trade deal with China last week opened up export opportunities for American farmers, manufacturers and energy producers. And his trade pact with Canada and Mexico, approved Thursday by the Senate, could help restore some auto production in the United States.
But Lovely and other critics warn that the deal with China leaves unresolved most of the toughest and most complicated issues dividing the world’s two biggest economies and that progress could unravel over time. They also caution that the new North American trade pact, though it might spur some job growth, will likely make American-built cars more expensive and less competitive globally.
Free trade has long been a mutually accepted priority for the world’s major industrialized economies. Many trade experts say they worry that in the long run, Trump’s relentlessly confrontational stance and eager embrace of tariffs could pose risks to both the U.S. and global economies. NAFTA, which took effect in 1994, triggered a surge in trade among the three countries. And it created a regional manufacturing bloc to compete with East Asia and Europe. But Trump and other critics argued that NAFTA cost the United States jobs by encouraging factories to move south to capitalize on low-wage Mexican laborers, who were largely prevented from forming independent unions.
At least 40% of vehicles would also have to originate in places where workers earn at least $16 an hour. That would benefit the United States or Canada — not Mexico, where auto assembly workers are paid a fraction of that amount.
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