Congress Must Have A Robust Post-USMCA Trade Agenda
Congress should be pleased with the soon-to-be successful passage of the USMCA, a deal that is quite limited in scope and impact but does achieve some real advances in modernizing digital trade, reducing agricultural tariffs, and improving enforcement of labor protections. However, it is critical that Congress doesn't wash its hand of trade policy now that the USMCA debate is over, because the President's larger, destructive trade strategy continues to erode the global rules-based trade system. Over the past two years, Trump has an undertaken an unprecedented experiment with protectionism, hoping to rejuvenate US manufacturing and broader jobs and growth. Instead, manufacturing has been driven into a deep recession while hundreds of thousands of jobs and tens of billions of dollars in total income growth have been destroyed. It is time now that Congress finally step up to challenge this failed experiment.
First, Congress must end the trade conflicts that even in the best case scenario don't serve any purpose, are largely targeted at US allies, and are done merely to harm the global trading system. The most important of these is to re-open the WTO's dispute resolution court, which was effectively shut down when the Trump administration refused to appoint new judges to fill open seats. With the dispute process closed, there is no legal way for countries to appeal protectionist measures taken against them, a process that has benefited the US significantly over past decades (indeed, the US has won 11 disputes against China, compared to China winning only 4 against the US) and whose dismantling serves no US interest whatsoever. Congress must also once and for all repeal Trump's tariffs on key US allies who are not committing trade abuses, particularly the steel and aluminum tariffs and threatened auto tariffs on Japan and the EU. These tariffs serve only to weaken jobs and income growth both in the US and abroad, and have no strategic goal because our allies aren't committing any trade abuses that would justify them.
Second, Congress must develop a coherent strategy to address the more difficult trade problems facing the country. The most prominent of these is dealing with China, a country that systemically commits trade abuses but whose "phase one" deal with Trump contains no details about addressing them. The President's unilateral trade war with China has not created the leverage to force them to actually pursue structural reforms in their economy, while significantly harming the US economy in the process. Instead, Congress must begin crafting a multilateral strategy that works alongside our trading partners and allies and offers benefits to China if it commits to genuine liberalization. You can read more about NDN's analysis of the economic costs of Trump's trade war here, and find NDN's broader work on trade and economic policy under the Trump administration here.