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President-elect Donald Trump has vowed to get tougher with trading partners, particularly China and Mexico. He campaigned against the Trans-Pacific Partnership (TPP), which he called a bad deal. It is unclear if he will seek concessions from the nations that are part of the pact.
Trump also promised to renegotiate the North American Free Trade Agreement (NAFTA), or get out of it completely, in his first 100 days in office. He has threatened to impose tariffs on countries to get concessions in trade deals.
Regarding NATA, leaders from both Canada and Mexico in recent weeks have said they would discuss ways to “modernize” the agreement to bring it up to date from the original pact agreed to 22 years ago. Trade policy contacts see this as the eventual conclusion of keeping NAFTA in place — with changes, perhaps major ones, ahead.
As for tariffs on goods from China and Mexico, experts tell us they would be deemed unilateral violations of international trade agreements. While that does not rule out a President Trump taking such action, talks with both countries are the more likely route, with clarifications and perhaps trade memorandum of understandings the possible result.
Meanwhile, US goods could suffer sales hits in China if Trump goes through with what China is terming a “naïve” plan of slapping a large 45 percent import tariff on Chinese products, according to state-backed Chinese newspaper Global Times. Should any such policy come into effect, China will take a tit-for-tat approach. “A batch of Boeing orders will be replaced by Airbus. US auto and iPhone sales in China will suffer a setback, and US soybean and corn imports will be halted,” the paper noted.
Comments: The warning from China is a clear sign that the country will not take lying down any major trade action like that suggested by Trump during the campaign. With rural America providing a significant component of the votes which propelled Trump to the presidency, that could become a factor in how Trump proceeds on this issue.
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