Trump is reshaping U.S. trade policy, but not at the scale he long promised



David J. Lynch | Washington Post

President Trump on Tuesday celebrated a negotiating breakthrough that paved the way for congressional approval of a new North American trade deal, one of the main goals of his presidency.

The compromise with House Speaker Nancy Pelosi (D-Calif.) over labor rights in Mexico comes as the president and his chief negotiator Robert E. Lighthizer strive to complete a more limited accord with China, just five days before U.S. tariffs are scheduled to hit Chinese goods.

Reaching agreements to reshape almost half of the country’s $4 trillion-plus goods trade would be a big political win for the president as he confronts a House impeachment inquiry.

But the two “America First” trade deals will provide only limited overall gains for the economy, according to independent studies, economists and executives. In particular, there is little chance that large numbers of outsourced factory jobs will return to the United States, as the president promised.

“What we’ve learned from the Trump trade revolution is that it’s much easier to hurt Chinese manufacturing than it is to help American manufacturing,” said economist Brad Setser of the Council on Foreign Relations. “In terms of bringing jobs back, you’re not going to see much success.”

U.S. factory payrolls fell by almost 6 million following the 1994 North American Free Trade Agreement (NAFTA) and China’s 2001 entry into the World Trade Organization. The new U.S.-Mexico-Canada-Agreement, NAFTA’s successor, promises to replace only 50,000 of them, according to a study by the International Trade Commission.

No formal estimates of the China deal’s impact have been released, since negotiations are continuing. But given its focus on farm goods, financial services market access and intellectual property protection, it likely will not create even that many factory jobs, economists and trade analysts say.

Read the full article here