Business Review Board / May 21, 2019

Trump’s USMCA Boosts American Wages

The U.S., Mexico, and Canada work toward finalizing a new comprehensive trade deal.

Patriot Post readers are well-versed in the true history of President Donald Trump’s extraordinary record, particularly when it comes to the economy. One focal point for the president is foreign trade. For two and a half years, Trump has been working to rectify what he argues are major trade imbalances with not only China but also with Canada and Mexico. Recent days brought news that Trump is scrapping tariffs on steel and aluminum from our North American trade partners, to which both nations responded Monday by lifting reciprocal tariffs on not just steel and aluminum but mattresses, boats, and various food items.

Reducing tariffs helps American consumers and farmers, but it was Trump’s primary negotiating chip to secure a better deal. And as we’ve previously noted, the USMCA — the trade agreement Trump negotiated to replace NAFTA — has some good provisions that will benefit Americans and create jobs.

One provision that we find to be particularly Trumpian is that, while Democrats are demanding a $15 minimum wage, a USMCA provision favors workers earning at least $16 an hour. The treaty stipulates that 40%-45% of auto parts sold in North America must be manufactured in factories whose workers earn $16 per hour. That is both “America First” and a bone for labor unions — the very blue-collar workers Trump may rely on to deliver wins in Rust Belt states again in 2020. No wonder union bosses are running to Leftmedia outlets to downplay its benefits.

Meanwhile, Trump worked to close a back door China was using to export cars to the U.S. Various American carmakers produce cars in China — cars then shipped to Canada, modified slightly, and imported into the U.S. sans tariffs. Again aimed at protecting American jobs, this move should please blue-collar workers if they can bypass the misinformation of Democrat Party poobahs who run the unions.

The deal will soon face Congress, so stay tuned.

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