Trump announces USMCA deal to replace NAFTA
California Sen. Kamala Harris condemned President Donald Trump’s tariff threat against Mexico, calling it another “Trump trade tax” and warning it could cost her home state tens of thousands of jobs.
Harris said Wednesday that if the White House imposes the tariffs next week, as the president has threatened, it will not only harm the state’s economy but could also cost local jobs.
“It’s estimated we could lose like 50,000 jobs because of it,” the senator told McClatchy. Those figures are based off an analysis done by a Texas-based economic consulting firm, the Perryman Group. According to the report, the country stands to lose 400,000 jobs as a result of a 5% tariff on Mexican goods over the course of a year, a figure that would rise if the Trump administration follows through on the president’s threat and increases the tariff rate over time.
The biggest job losses would come in retail trade, i.e. merchandise sales, including restaurants, the report projects. Large job losses are also predicted for the manufacturing sector.
California is second only to Texas in terms of the total number of jobs at risk, the analysis found.
‘Particularly bad for California’
“I call it the Trump trade tax,” said Harris, who is one of the leading contenders in the 2020 Democratic presidential primary. “Yet again we are going to have a situation where American consumers are going to have to pay a price for this administration’s trade policy.”
Fellow California Sen. Dianne Feinstein also spoke out against the proposed tariffs on Wednesday. “The president’s plan is unnecessary, disruptive and chaotic,” the veteran Democratic lawmaker said in a statement. “This will be particularly bad for California.”
The president blindsided lawmakers last week when he declared on Twitter that he intended to place a 5% tariff on all Mexican imports “until such time as illegal migrants coming through Mexico, and into our Country, STOP.”
That has set off a scramble among U.S. and Mexican negotiators to reach an agreement on how to handle the explosion of migrants coming to the United States from Central America. Trump set a deadline of June 10. It has also alarmed supporters the free trade deal the president signed with Mexico and Canada last year, which extends and updates the 1994 North American Free Trade Agreement, i.e. NAFTA. New tariffs could scuttle the deal, which Congress has yet to ratify.
On Wednesday, the president tweeted from Ireland that “Progress is being made,” in the talks with Mexico, “but not nearly enough! Border arrests for May are at 133,000 because of Mexico & the Democrats in Congress refusing to budge on immigration reform.”
Mexico expected to retaliate
In addition to driving up costs on goods imported from Mexico, the tariff increase will also hit many U.S. exporters if Mexico retaliates, as expected. The Mexican government has already drafted a possible list of American goods to tax, in response. That list is reportedly similar to the goods Mexico targeted in retaliation for steel and aluminum tariffs that the Trump administration recently lifted.
California dairy producers were among those hurt by the last round of Mexican tariffs. Mexico is far and away the largest export destination for dairy products from the state.
Overall, the state exported $30.7 billion worth of goods to Mexico in 2018, according to the California Chamber of Commerce, led by computers and electronic products. That makes it California’s top export market. Canada is second.
That’s why many business groups in California — and around the country — are strongly in favor of NAFTA 2.0, or the United States-Mexico-Canada Agreement, as Trump has renamed the deal.
Democrats in Congress have expressed reservations about the deal, however.
“We are trying to go to yes on US-Mexico-Canada trade agreement,” House Speaker Nancy Pelosi said Wednesday during her weekly press conference at the Capitol. But Pelosi said Democrats still have concerns about whether the deal is enforceable, as well as how it could impact workers rights, the environment, and pharmaceutical pricing. “You have to have enforcement as part of the agreement, not as part of a sidebar letter,” she said.
2020 trade debate
Harris, however, indicated she wasn’t considering supporting the trade deal. Asked if additional tariffs on Mexico would make her less likely to support the U.S.-Mexico-Canada Agreement, she responded, “I’m not in favor of the USMCA, what I call NAFTA 2.0.”
That inches her closer to some of her 2020 rivals on the left, like Vermont Sen. Bernie Sanders and Massachusetts Sen. Elizabeth Warren, and away from the pro-free trade platform embraced by Vice President Joe Biden, the race’s current frontrunner.
The California senator has previously said she would not have voted for the original NAFTA deal, saying in an interview on CNN in April, “I believe that we can do a better job to protect American workers.” Harris also came out against the Trans-Pacific Partnership or TPP, an Obama-backed trade deal between 12 Asian and Pacific nations, during her 2016 Senate race. Trump ultimately pulled the country out of TPP after he was elected.
Trade has not been one of the leading topics thus far in the Democratic primary, but President Trump has already signaled he plans to focus on trade in the 2020 general election, particularly his trade stand-off with China. He campaigned successfully on the issue in 2016, hammering free trade deals like NAFTA for costing American jobs and promising to revive the country’s manufacturing sector. The argument resonated among many workers, especially in Rust Belt states like Michigan and Ohio.
“China is DREAMING that Sleepy Joe Biden, or any of the others, gets elected in 2020,” the president tweeted last month. “They LOVE ripping off America!”