By Alan Rappeport
New York Times News Service
WASHINGTON — President Donald Trump heads to Iowa on Tuesday praising his new trade agreement with Canada and Mexico as a win for farmers, saying the pact will send cash pouring into the United States and enrich America’s agriculture and industrial workers.
“The farmers are so thrilled with the USMCA,” Trump said Tuesday, referring to the new United States Mexico Canada Agreement. “We just opened up Mexico and Canada and it’s great for our farmers,” he said hours before a campaign rally in Council Bluffs, Iowa.
But many are not ready to cheer.
NAFTA, the North American Free Trade Agreement, could soon be on its way to becoming the USMCA, but U.S. businesses still face a cloud of trade uncertainty. The biggest concern: Lingering tariffs on foreign steel and aluminum that do not appear to be ending anytime soon.
The metal tariffs, combined with retaliatory taxes that foreign governments have placed on U.S. products, are undercutting the concessions that Trump won in the deal. While the new trade pact gives U.S. farmers greater access to Canada’s dairy market and requires that a higher percentage of a car be produced in the United States, business and trade groups are raising questions about whether the agreement will actually deliver the economic boost the president promises.
“The celebration is muted because of the tariffs on steel and aluminum,” said David Ahlem, chief executive of Hilmar Cheese Co., a California-based dairy business with 1,400 employees. “I think many people expected those tariffs would go away as part of the deal, but there’s no clear path to that happening.”
In response to Trump’s metal levies, Mexico hit U.S. goods like cheese with 25 percent tariffs, stalling business in the industry’s largest export market. As a result, Ahlem said that even if the USMCA is passed in Congress next year and opens access to Canada’s dairy market, he will be worse off because of the new trade barrier with Mexico.
“The old NAFTA or the TPP would have been better,” Ahlem added, referring to the Trans-Pacific Partnership agreement that Trump withdrew from last year. “It’s not clear to me what the strategy is.”