The United States reached an agreement with Canada and Mexico to lift the Trump administration’s tariffs on steel and aluminum imports. The news comes as a breath of fresh air to investors and President Trump in the midst of deteriorating trade relations between the U.S. and China. The Trump administration hopes lifting the tariffs will help in the ratification of the USMCA trade agreement signed by Canada, Mexico, and the United States in November to replace NAFTA. Matt Fisher reports.
Jim Geraghty of National Review and Greg Corombos of Radio America applaud the Justice Department for prosecuting a Treasury Department employee for giving sensitive information to the media. They’re also pleasantly surprised to see Mexico getting serious about screening the caravan of Hondurans hoping to reach the United States. And they slam Twitter for it’s absurd double standards, as conservatives get suspended or banned on a regular basis but Nation of Islam leader Louis Farrakhan gets no punishment for referring to Jews as “termites.”
Earlier this week, President Trump hailed a new trade agreement with our Canadian and Mexican neighbors, but is the agreement a good one for the U.S. and is it better than the North American Free Trade Agreement, or NAFTA, which Trump has railed against for years.
Barbara Hackman Franklin served as U.S. Secretary of Commerce for President George H.W. Bush and was heavily involved in the original NAFTA negotiations. She is very pleased to see the three countries reach a deal.
“I’m delighted that this negotiation is now done because I think the process of it was unsettling to investors, businesses, consumers. Some of the rhetoric surrounding it was not real helpful so I think it’s a good thing that we got this done,” said Franklin, who is now president and CEO of Barbara Franklin Enterprises.
The biggest changes to the deal, known as USMCA, would impact the auto and dairy industries. Franklin says the agreement could be very good news for American dairy exporters.
“Canada agreed to open its dairy market by eliminating some of the quotas and the pricing system that has been in place and has been problematic our dairy farmer. Hopefully, our dairy farmers will be able to send more butter, milk, and cheese to Canada under this agreement,” said Franklin.
The changes for the auto industry could be very good for manufacturers and their employees. Wages would be set at a minimum of $16 per hour and a significant majority of auto parts would be made in North America. Some economists fear a wage floor would mean higher prices for consumers, but Franklin says it’s too soon to tell.
The major U.S. concession is maintaining the NAFTA provision on dispute resolution.
“Under this mechanism, it means that disputes can be solved by national panels, in other words panels of the two countries together, rather than going through the U.S. judicial process having to do with anti-dumping and countervailing duty,” said Franklin.
Trump badly wanted to change the policy but it appears to have been a deal-killer for Canada.
The deal is still not done and the clock is ticking. The leaders of all three nations must sign the USMCA and Congress must ratify it. Franklin says it is critical for Mexico to approve it before a change in its presidency on December 1. She also says the midterm elections here could influence the fate of the agreement.
While Franklin is not a fan of Trump’s approach to trade negotiations and the uncertainty it creates, she is still hopeful that the USMCA and negotiations with China and the European Union end up boosting our economy.
“I certainly hope we’re going to end up in a better spot. With all of these agreements, the proof is in the pudding and how it actually works,” said Franklin.
“My hope, always, is that whatever we do stimulates more trade because I believe that trade does help economic growth,” she added.
The United States and Mexico are on the brink of a new bilateral trade deal that will give a bigger boost to our economy but also leave our wallets a bit emptier, according to a top free market economist.
On Monday, President Trump and Mexican President Enrique Pena Nieto announced they reached a consensus on a new trade agreement that Trump hopes will replace the North American Free Trade Agreement, or NAFTA, but thus far does not have Canada on board.
The agreement still includes many NAFTA provisions but also makes some important changes.
“Many of the agreements that were in NAFTA are actually in place within this bilateral trade deal, when you think about lowering tariffs and having a lot of freer trade in general. But the auto sector is one key point that there is definitely a difference compared with NAFTA,” said Vance Ginn, director of the Center for Economic Prosperity at the Texas Public Policy Foundation.
The proposed trade agreement requires that 75 of the parts of all automobiles sold in the U.S. and Mexico must be produced in the two countries. Currently, the mandate is 62 percent. The deal further requires that 40-45 percent of the workforce making those parts make a minimum of sixteen dollars per hour.
Ginn sees positives and negatives in the proposal. For example, he likes the fact that American business will have to do less guessing.
“It decreases the foreign trade uncertainty that’s been out there so long. That’s why we’ve seen the stock market go up a lot and a lot of these entrepreneurs are saying, ‘You know what? I can start to budget for the future and make some transactions,'” said Ginn.
He’s also glad to see a badly needed update on internet commerce, which is still based on language crafted in 1994.
“When NAFTA was created, e-commerce wasn’t a big deal and now it really is. So they put some rules in place that seem to be pretty free-market oriented,” said Ginn.
The problem, according to Ginn, is that stronger mandates on domestic production and hourly wages is not going to be pretty for American consumers.
“This will mean higher prices for auto consumers. As you raise the cost of doing production from a wage standpoint and a parts of origin standpoint, where the production will take place. Often times you’ll find the best place to do it based on the lowest costs and the highest quality. And this seems to take that out a little bit,” said Ginn.
The U.S.-Mexico framework is scheduled to last for 16 years and would be up for review every six years. However, Ginn is hopeful that Canada will be part of the mix before everything is finalized.
“I do think it is very important to make sure that Canada is part of this agreement. Canada is a large trading partner for us. If for some reason they don’t join it as well, I do that would be a negative moving forward,” said Ginn.
Former Rep. Tom Tancredo, R-Colo., is thrilled to see President Trump ordering National Guard personnel to the U.S.-Mexico border but says the only way to fully stop the flow of illegal immigration is to make sure potential migrants know they have no chance for a job if they come here.
Tancredo served in the House of Representatives for ten years, where he became known as one of the strongest opponents of illegal immigration. He was a candidate for the GOP presidential nomination in 2008 and twice ran for governor of Colorado.
He says Trump is doing the right thing by calling up the National Guard.
“It’s a long time coming. I can’t tell you how glad I am to see it happen,” said Tancredo, who says the Guard can make a big difference.
“I think with National Guard, you do not have the posse comitatus issue,” said Tancredo referring to federal law that bars the military from being used as domestic law enforcement. “We use them a lot in areas of floods and fires and earthquakes and people who are causing trouble (through riots, etc.),” said Tancredo
Tancredo says the situation is urgent.
“We are being invaded, have been for a long time. The government of Mexico has participated in this for a long time,” said Tancredo.
Years ago, Tancredo saw firsthand in Arizona how the Mexican government facilitates illegal immigration into the U.S.
“I was with the Border Patrol and we were glassing the desert in Mexico. We saw two buses pull up, let the people out, who then swarmed across the line into the United States, into the desert mind you.
“Those buses were hired by the Mexican government. People on them were provided a bag of food, water, and…an explanation of what to do when you ran into a border patrolman. This was all part of a Mexican government activity and funded by them,” said Tancredo.
Tancredo says that posture from the Mexican government is directly relevant to the current border crisis.
“This idea that the Mexican government is aiding and abetting this caravan for instance is certainly not new. It is an act of a hostile, hostile neighbor,” said Tancredo.
What leverage does the U.S. have to persuade Mexico to stop exacerbating illegal immigration? Tancredo says it starts with trade. He says the length of the National Guard deployment could have trade implications.
“It probably becomes part of the bargaining that’s going on between the United States and Mexico in an around NAFTA. I wouldn’t doubt for a moment that the president is using this as another bargaining chip,” said Tancredo.
He says another effective tool could center on the money being sent back to Mexico and other Latin American nations from inside the U.S.
“The other thing you could is make it much more expensive to send money back home to Mexico. Presently, Mexican nationals in the United States send back about $25 billion a year,” said Tancredo.
When he was in Congress, Tancredo says that money wiring constituted the second largest influx of money into Mexico, second only to their national oil company.
However, Tancredo is adamant that there’s only one real way to solve the illegal immigration problem.
“You would pas a law mandating E-Verify for every business in the United States and then you have to enforce it. You’d have to make sure than if an employer that ignores E-Verify hires people even though they haven’t gone through the E-Verify process gets fined. If it happens a couple more times, maybe they spend time in the cooler. If you do that, you eliminate the draw,” said Tancredo.
But there’s a problem.
“Because it would work, you will never see it pass this Congress, at least this Congress,” he said, noting Republicans are a major part of the problem along with most Democrats.
“You’ve got Republicans who are as adamant in their opposition to actually securing our borders as any Democrat because they are what I call part of the Chamber of Commerce Republicans. They are just as much of a block to doing something significant,” said Tancredo.
Tancredo says he’s all for Trump’s wall but says that only addresses the symptoms rather than the cause of illegal immigration.
“Until you (enact E-Verify), you have to build barriers as much as you can. I’m all for them. Don’t get me wrong, but they will not solve the problem,” said Tancredo
Jim Geraghty of National Review and Greg Corombos of Radio America have good news from Wall Street: stocks are soaring, regardless of the chaos in Washington. Transcripts of President Trump’s January phone calls to the leaders of Mexico and Australia were leaked to the press this week, and Jim and Greg react both to Trump’s comments and the blatant leaking and publishing of classified information. And they have little sympathy for health insurance companies who are forced to bail on the Obamacare exchanges after losing huge amounts of money, but the vanishing coverage is leaving many Americans in a terrible position while Congress accomplishes nothing.
President Trump has floated the idea of a border tax or border “adjustability” with Mexico to raise the revenues needed to fund construction of a border wall along America’s southern border, but the leader of the nation’s largest grassroots taxpayers group says the president must be careful not to punish American consumers.
“This is a very confusing and intricate issue, probably the most complex aspect of the tax reform discussion right now,” said National Taxpayers Union President Peter Sepp.
Among his first actions as president, Trump authorized construction of the border wall and once again vowed that Mexico would pay for it. After the Mexican president dismissed the idea, Trump and White House Press Secretary Sean Spicer have both discussed the idea of a border tax on Mexican imports as high as 20 percent.
But Sepp says it is unclear whether they are referring to an actual border tax or a concept known as border adjustability.
“What we’re really doing here is reading tea leaves. This is a tea cup that goes very deep. We’re having a difficult time telling exactly what the administration wants to do here,” said Sepp.
The answer it critical because Sepp says the difference between a straight tax and border adjustability is significant. He says an actual border tax would not be good news for working Americans, since Mexico can simply pass along their higher costs to the people who buy its products.
“Taken in isolation, a border tax, where you have a trade deficit with a given country, you slap a tax on its goods coming into the country that’s aimed specifically at them, that could result in consumers having to pay more out of their own pockets here in the United States,” said Sepp.
Border adjustability is different.
“What (adjustability) tries to achieve is if you send something out of the United States for export and sell it abroad, it is not subject to U.S. tax. If you are bringing in goods, either finely finished goods or raw materials, to make something in the United States, you’re not allowed to deduct it anymore under border adjustability. It’s supposed to be a border-neutral way of handling economic activities,” said Sepp.
Sepp says that concept along with fundamental tax reform involving lower tax rates, full expensing of investments and allowing companies to be taxes only by the countries where they earn their money, could have some benefit.
“If you take an entire reformed system like that with border adjustability in it, you might be able to minimize some of the impacts on consumers,” said Sepp.
Trump critics allege that any such move to draw more money out of Mexico could trigger a trade war with one of our top trading partners. Sepp says that is unlikely unless Trump goes ever further and slaps new tariffs on Mexican goods.
“Those kinds of things always tend to invite some kind of retaliatory action. We need to be careful about how these kinds of policies are pursued. Sometimes a tariff might be justified if another country initiates a tariff against us. But for us to do that unilaterally from the start can complicate matters to a great degree,” said Sepp.
Trump’s first executive action on trade was the formal withdrawal of the U.S. from the Trans-Pacific Partnership, or TPP. Sepp says that decision is understandable.
“That treaty did have its flaws, a multi-lateral agreement involving something like a dozen nations, is going to be pretty complex by its very nature,” said Sepp.
But Sepp says existing and prospective trade partners would have a better idea of where Trump wants to lead on TPP if he listed reasons for the U.S. withdrawal.
“The problem is, by simply walking away from the Trans-Pacific Partnership and saying, ‘Well, we’ll try bilateral approaches,’ that creates a great deal of uncertainty about U.S. trade policy going forward,” said Sepp.
“To be more specific about the flaws in TPP would have been helpful in sending signals around the world that the U.S. is still committed to free trade, but these are the particular problems that we have with an agreement like TPP,” said Sepp.
While Sepp says border adjustability is the thorniest issue, he wants to see Congress get moving on substantive tax reform while the opportunity is available.
“I think the momentum is still there. What needs to happen going forward is the tax writing committees – House Ways & Means and Senate Finance – need to have hearings on these specific aspects of tax reform. Answer some of the questions are causing a lot of fear and speculation, and then start to build a legislative consensus around a particular bill,” said Sepp.
“Right now, we have a blueprint for tax reform. That is not legislation. We need to get to the legislative part as quickly as possible,” said Sepp.
Greg Corombos of Radio America and David French of National Review cheer the many thousands of Americans marching for life and against abortion Friday in Washington. They also shake their heads at President Trump’s suggestion that a 20 percent border tax on Mexican imports might be a good way to pay for a border wall. And they discuss all the humiliating concessions and retractions Atlantic magazine has to make following its story suggesting ultrasound is used to deceive women into believing their unborn babies are people with heartbeats who can feel pain.
As pro-life activists take part in the annual March for Life in Washington, they are more optimistic than any time in recent memory as a Republican Congress and a pro-life president get to work and more and more younger Americans join the cause thanks to modern science.
Leaders in the movement, like Susan B. Anthony List Vice President for Government Affairs Marilyn Musgrave, expect President Trump to make good on all his pro-life campaign promises.
“He made a pledge to work to defund Planned Parenthood, to support the Pain Capable Unborn Child Protection Act, to make the Hyde Amendment permanent, to nominate pro-life justices to the Supreme Court. I might add that that’s the big one. That is the big one,” stressed Musgrave.
There’s already been action on two of those promises. On Monday, President Trump reinstated the Mexico City Policy, which forbids U.S. tax dollars from going to any organization performing or advocating for abortion in foreign countries. In addition, the House of Representatives passed legislation to make the Hyde Amendment permanent. The Hyde Amendment prohibits taxpayer dollars from funding abortions in the U.S.
Musgrave applauds Trump and the House. She notes that every Republican who voted was in favor of the bill, along with three Democrats.
“It is very good times for us because we have hope that we can actually make gains for life,” said Musgrave.
She also says there is no reason Republicans can’t defund Planned Parenthood.
“I believe defunding Planned Parenthood, redirecting those dollars to other health care providers that don’t do abortion, I think that’s the one that’s most quickly attainable by the House and Senate through the reconciliation process,” said Musgrave.
Reconciliation is a budgeting process that skirts the possibility of a filibuster, meaning a simple majority in the Senate could defund Planned Parenthood.
Musgrave says accomplishing the Trump promises would save countless lives.
“The Hyde Amendment has saved over two million lives since 1976. It’s my prayer that at this time in history, we will look back on our efforts, our marching, our support for women and their babies, the acts of this Congress and this president, we will look back and know that many, many lives have been saved,” said Musgrave.
In addition to favorable political winds at the moment, Musgrave says the future of the pro-life movement is bright because of the thousands of young people who are actively part of the effoet to protect the unborn.
“The March for Life, with now the faces of many young people, is an incredible encouragement to me,” said Musgrave. “We are seeing the new face of the pro-life movement and that is incredibly encouraging as we see millennials speaking up for life.”
She says one reason for the youth infusion is that science keeps showing the humanity of the unborn.
“I can remember the day when they said it was just a blob of tissue. That’s what they would tell a pregnant woman. Now we know that those precious little babies are operated on in utero. We know that they can feel pain after the fifth month of pregnancy,” said Musgrave.
“We know these things. It’s not disputable anymore. So the preciousness of that unborn child, the humanness is ever more an more evident, especially to the millennials that are marching,” said Musgrave.
Musgrave says the real scientific game-changer is the sonogram or ultrasound. And while some recently claimed ultrasounds give women false evidence of their baby’s humanity, Musgrave says those images are very powerful to mothers dealing with an unplanned pregnancy.
“When women see the image, they know that that is a child. That is their baby. So there is a reason that the pro-choice crowd doesn’t want women to see the ultrasound. The humanness of that child is very evident right there for the mother to see,” said Musgrave.
She says many ministries are centered around giving women the chance to see their babies.
“It’s just precious to me when you see local communities, pro-life people supporting mobile ultrasound units. And I love it when a pastor gets up in a church and saying, ‘Because of your donations for this mobile ultrasound, you have saved many lives,” said Musgrave.
Musgrave says the ultrasound had a profound impact in her family.
“I remember the day I saw the picture of my grandson, Isaac. It was an ultrasound picture. I knew even then that he was going to look just like his daddy. And by the way, he does. That ultrasound speaks volumes. That’s the image that we see, that people are sharing with their family and friends. Science is on our side,” said Musgrave.
The March for Life will be the second for Musgrave in less than a week. She scoped out the Women’s March on January 21. In addition to missing any consistent message among the demonstrators, Musgrave was especially bothered by the number of men carrying signs in support of Planned Parenthood.
“Does that in any way relieve you of your responsibility for your sexual actions? If children are produced by that, do you just want them aborted? Do you not want them supported and taken care of? It was an interesting emotional time for me to be among those marches,” said Musgrave.
However, Musgrave firmly believes the pro-life side is advancing and that the combination of science, young activists and allies in Congress and the White House means the future is very bright.
“Now we have the opportunity to do things in the pro-life movement that I’ve not seen in my lifetime. It’s a very encouraging time,” said Musgrave.