Two Trade Deals This Week!

This week marked another milestone in President Trump’s goal to improve the lives of American citizens. The United States Mexico Canada Agreement (USMCA) passed the Senate with overwhelming bipartisan support on Thursday, January 16. This trade agreement will replace the North American Free Trade Agreement (NAFTA), which has not been updated since the 1990s, and expand markets for farmers, manufacturers, businesses and workers.

While NAFTA prompted the loss of 700,000 jobs by moving production facilities outside of the United States, the USMCA will encourage greater domestic production by promoting free trade, economic growth and continued cooperation between the United States, Mexico and Canada. Specifically, Wisconsin's world-famous dairy industry will benefit from the USMCA trade agreement because Wisconsin dairy farmers will be able to export the equivalent of 3.6% of Canada’s dairy market, more than tripling the existing level of approximately 1%. Additionally, there are 231,000 Wisconsin jobs and nearly 11 billion dollars in Wisconsin exports to Canada and Mexico that will be provided a better playing field.

In addition to the Senate’s passage of the USMCA, President Trump also signed phase 1 of the U.S. trade deal with China. For years, China has created an unfair advantage for itself with unethical trade practices and currency manipulation. This created a situation that, while the U.S. was able to trade with China, put Americans at a disadvantage because of Chinese foul play. This new agreement will reduce U.S. tariffs on certain Chinese imports and increase the volume of U.S. exports.

On exports, in 2017, China purchased roughly $185 billion of U.S. goods and services. Under this new agreement, China has committed to increase these purchases by $200 billion over the next two years. The deal stipulates that China will buy $77 billion in additional goods and services in 2020 and $123 billion in 2021 in order to fulfill the $200 billion increase. Specifically, on agricultural products, China has agreed to increase purchases by 66 percent over the next two years. This means that U.S. farmers, workers and businesses will begin to see increased demand, putting more money into the pockets of our citizens. The deal also marks an important step in stopping China’s practice of currency manipulation as the agreement prohibits them from unfairly devaluing its currency in order to lower the value of goods.

I applaud President Trump for his leadership on the USMCA and am glad that we have a President who is willing to tackle issues that his predecessors, of both parties, refused to address. Along with a booming economy and record-low unemployment, I am happy that we can continue to deliver victories for the American economy and our workers.