On Oct. 1, President Donald Trump announced the negotiation of The United States Mexico Canada Agreement (USMCA), to replace the North American Free Trade Agreement (NAFTA). The trade deal was conveniently announced to provide Trump a trade “win” just ahead of the midterm elections, changing the subject from the Supreme Court nomination hearings, but it won’t take effect until ratified by Congress and the Canadian and Mexican legislatures well after the midterms. Although USMCA differs from NAFTA in detail, the broad terms of managed trade remain remarkably consistent.
“The main achievement of the Trump renegotiation of NAFTA is changing its name,” said Libertarian National Committee Chair Nicholas Sarwark. “The rules on trade are almost exactly the same as they were. We would welcome more free trade and fewer agreements that micromanage how much of a product has to be made in each country.”
USMCA leaves the disastrous steel and aluminum tariffs in place. In an attempt to give the tariffs a positive spin, the Trade Partnership estimated in a 2018 study that they will save 33,464 jobs in the steel and nonferrous metals industries. The less obvious costs are much greater, though. As a direct result of those same tariffs, soaring steel and aluminum prices will cause the loss of 146,000 jobs in downstream metal fabrication industries.
USMCA increases the amount of each automobile that must be domestically produced in order to qualify for duty-free exports, from 62.5 percent to 75 percent. It also mandates a $16 minimum wage for 40 percent of auto workers. The bottom line is that Americans will be paying more for cars and anything else made out of metal.
There’s no good reason for any of these quotas or tariffs. They protect at most a few privileged industries and workers at the expense of everybody else. At the G7 Summit in June, Trump proposed, “We should at least consider no tariffs, no barriers — scrapping all of it.” That’s an idea Libertarians would wholeheartedly support.
About 800 Libertarians are running for local, state, and federal office this November. Upon election, all of them will support rescinding government interference in honest business dealings, whether domestic or international.