President Trump Created a New US Trade Model
The Trump Administration is pushing for trade talks with other nations and plans to use its new USMCA trade agreement with Canada and Mexico as the model for the future negotiations with its partners.
This President is looking to redefine the rules on issues ranging from foreign currency exchange to how US trade partners conduct business with China.
As Trade Representative Robert Lighthizer called USMCA, the new pact with Canada and Mexico, a “paradigm-shifting model,” US trade partners are now bracing for tough trade talks.
The US is still working on a strategy how the new pact will apply to others. However, the Key element, as President Trump has noted, will be that it is “a privilege for them to do business with us,” aka the America First policy.
“The US is showing a power play,” said Andre Sapir, a former European Union economic adviser. “I do not think Europe will want to enter into such an agreement, it would want to have balanced agreement.”
And Japan and Germany, the largest car exporters to the US after Canada and Mexico, are preparing for US demands for quotas to escape 25% tariffs that President Trump has warned he will impose should these allies not align with his new trade policy.
As we are all keenly aware in just the last few weeks, President Trump had struck a deal with Canada and Mexico, signed a trade agreement with SKorea and convinced PM Abe of Japan to begin economic talks on trade.
Several months ago the US had a multi-pronged attack on its trading partners, President Trump made it work with Mexico and Canada. Now, and his Trade Team will Zero In on China and then the EU. Expect all of the US trade partners to align with President Trump’s America First trade declaration