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Trump Turbulence Lags Momentum for North American Trade Deal

The Trump administration had taken steps in recent weeks to work with Democratic and Republican lawmakers

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Trump, North American, Trade Deal
A worker stacks bananas to be exported in Ciudad Hidalgo, Mexico, May 31, 2019. President Donald Trump plans to put 5% tariffs on Mexican imports starting June 10 and then push them higher if the Mexicans don’t halt the surge of Central American migrants across the U.S. border. VOA

The Trump administration had taken steps in recent weeks to work with Democratic and Republican lawmakers to address concerns about the proposed United States-Mexico-Canada trade agreement — and then came the threat of a new tariff.

President Donald Trump said this past week that he would put a 5% tariff on Mexican imports unless America’s southern neighbor cracked down on Central American migrants’ efforts to cross the U.S. border.

His recent decision to remove U.S. tariffs on steel and aluminum imports from Canada and Mexico had appeased mostly Republicans who were using their trade votes as leverage to do away with those penalties.

The administration also had committed to meeting with a group of House Democrats to allay their concerns. That gesture created goodwill, and as House Speaker Nancy Pelosi, D-Calif., described it, put Democrats “on a path to yes.”

Trump, North American, Trade Deal
FILE – Sen. Charles Grassley, R-Iowa, is pictured during a meeting on Capitol Hill in Washington, Sept, 28, 2018. VOA

Now it’s unclear where that path may lead.

Jobs at stake

Influential business groups fear that Trump’s threat against Mexico could derail the proposed trade agreement.

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“The last thing we want to do is put that landmark deal — and the 2 million manufacturing jobs that depend on North American trade — in jeopardy,” said Jay Timmons, president and CEO of the National Association of Manufacturers.

The U.S. Chamber of Commerce said it was considering legal action to block the tariffs from going into effect.

Some GOP senators are rankled, too, most notably Charles Grassley of Iowa, chairman of the Senate Finance Committee.

“This is a misuse of presidential tariff authority and counter to congressional intent,” Grassley said.

Trump, North American, Trade Deal
FILE – U.S. House Speaker Nancy Pelosi, D-Calif., addresses the Commonwealth Club, May 29, 2019, in San Francisco. VOA

Congressional aides from both parties said that it’s too soon to say whether Trump’s proposal will derail the agreement. But it does make it harder for lawmakers to assess how the agreement would improve the economic landscape if the tariffs on Mexico go into place.

Democrats seem mostly concerned with other breaking developments.

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Hours before Trump announced his tariff plan, his administration tried to set up the agreement for a possible congressional vote before the August recess. The administration completed the formal steps necessary to start the clock for submitting legislation to Congress.

Not ‘positive’

Pelosi said that was “not a positive step” and “indicates a lack of knowledge on the part of the administration on the policy and process to pass a trade agreement.”

Democrats want to strengthen enforcement of labor and environmental standards in Mexico. They have pushed for Mexico to change labor laws that have encouraged wages as low as $1 or $2 per hour at some plants, giving U.S. companies a strong incentive to move operations south of the U.S.-Mexico border.

Mexico lawmakers have approved a law that requires secret-ballot union votes and proof of workers’ consent for contracts. Democrats in Washington want to ensure follow-through, and Pelosi still holds the final say in determining when, or whether, the agreement comes up for a vote.

Trump, North American, Trade Deal
A stock monitor shows exchange rates on a storefront in Mexico City, Mexico, May 31, 2019, a day after U.S. President Donald Trump’s threat to impose a 5% tariff that could rise substantially on all Mexican imports. The peso dropped more than 3% against the U.S. dollar by Friday morning. VOA

Pelosi also joined several Republican senators in slamming Trump’s tariff threat, saying it is “not rooted in wise trade policy but has more to do with bad immigration policy on his part.”

“Yet again, the president is sowing chaos over the border instead of delivering solutions for American workers and for American consumers,” Pelosi said.

White House counselor Kellyanne Conway said the tariffs should not jeopardize passage of the trade pact and that the president simply wants Mexico to do more to stem the flow of migrants.

She said the White House is confident it would pass the Democratic-run House, if Pelosi put it to a vote.

Investors unhappy

Trump said he had the authority to impose a 5 percent levy on all goods imported from Mexico and pledged to increase those duties to as high as 25 percent if Mexico did not dramatically reduce the number of migrants crossing the border.

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Investors have responded negatively, with the Dow Jones industrial average closing Friday down roughly 355 points, or 1.4%.

Still, Conway told reporters that “tariffs are a good way to get a trading partner’s attention, and apparently it did.”

Mexico’s foreign relations secretary, Marcelo Ebrard, announced that he and Secretary of State Mike Pompeo would lead talks Wednesday in Washington, a move seen as potentially easing tensions and avoiding retaliatory tariffs.

Both Mexico and Canada are moving ahead with steps toward ratifying the trade agreement.

Canada’s foreign minister, Chrystia Freeland, indicated that it’s up to the U.S. and Mexico to work out their dispute. “This is a bilateral issue,” she said. (VOA)

Next Story

Trump EPA Finalizes Rollback of Key Obama Climate Rule that Targeted Coal Plants

The new Affordable Clean Energy (ACE) rule gives America's 50 states three years to develop their own emissions reduction plans

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Trump, Obama, Climate
EPA administrator Andrew Wheeler speaks with the media at the Environmental Protection Agency, June 19, 2019, in Washington. VOA

The Trump administration is rolling back rules to curb greenhouse gas emissions in the United States as scientists continue to warn countries to rapidly cut emissions to prevent the most drastic effects of climate change.

The Environmental Protection Agency (EPA) announced Wednesday it had finalized rules to replace the Clean Power Plan, former President Barack Obama’s initiative to cut global warming emissions from coal plants.

The new Affordable Clean Energy (ACE) rule gives America’s 50 states three years to develop their own emissions reduction plans by encouraging coal plants to improve their efficiency.

By contrast, the Clean Power Plan was designed to slash power plant carbon emissions by more than one-third from 2005 levels by 2030 by pushing utilities to replace coal with cleaner fuels like natural gas, solar and wind.

Trump, Obama, Climate
The Trump administration is rolling back rules to curb greenhouse gas emissions in the United States. VOA

The Obama-era plan was never enacted, however, because of lawsuits filed by Republican states and hundreds of companies. The Supreme Court halted its enactment in February 2016.

“States will be given the flexibility to design a plan that best suits their citizens environmental and energy needs, according to a summary of the new rules,” according to a summary of the ruling.

EPA Administrator Andrew Wheeler said at a Washington news conference, “Our ACE rule will incentivize new technology which will ensure coal plants will be part of a cleaner future.”

But environmentalists, many Democratic lawmakers and some state attorneys general have labeled the new rules the “Dirty Power Plan,” maintaining they will lead to increases in carbon emissions and other pollutants over the next few decades.

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“At a time when Americans are urging us to take meaningful climate action and reduce our carbon footprint, today’s Dirty Power Plan is a failure of vision and leadership,” said Joe Goffman, executive director of Harvard University’s Environmental & Energy Law Program.

Even the EPA’s own regulatory analysis last year estimated Trump’s ACE rule would kill an additional 300 to 1,500 people each year by 2030 because of more air pollution from the U.S. power grid.

Trump has, nevertheless, dismissed scientific warnings on climate change, including a report this year from scientists at more than a dozen federal agencies noting that global warming from fossil fuels “presents growing challenges to human health and quality of life.”

Trump promised early in his presidency to kill the Clean Power Plan as part of an effort to revive the ailing coal industry, contending it exceeded the federal government’s authority.

Trump, Obama, Climate
The Environmental Protection Agency (EPA) announced Wednesday it had finalized rules to replace the Clean Power Plan. Pixabay

Wednesday’s announcement to overturn Obama-era climate rules is part of a broader Trump administration effort to roll back “a multitude of health, safety environmental and consumer protections at the behest of corporate interests,” the non-profit consumer rights advocacy group Public Citizen concluded in a report released in May.

The report said shortly after Trump took office in early 2017, the National Association of Manufacturers (NAM) sent the Trump administration a list of 132 regulations that “concerned” members and detailed their “preferred course of action to address its concerns on each of the regulations.”

The report concluded that “Regulatory agencies have granted or are working on granting 85 percent of the wishes related to rulemakings on a list of deregulatory demands submitted” by NAM.

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The new rule is expected to take effect within 30 days. (VOA)