Within the past week, two major trade deals were reached—passage of the USMCA and the first phase of a tariff deal with China.
The Hill reported on January 16 the U.S. Senate passed a bill which would implement the Trump Administration's update to the North American Free Trade Agreement (NAFTA) known as the U.S.-Mexico-Canada Agreement (USMCA).
Association of Equipment Manufacturers (AEM) Senior Vice President of Government and Industry Relations Kip Eideberg issued the following statement on the Senate's ratification of the USMCA: "Equipment manufacturers, farmers, and hardworking families across the country are thankful for today’s full congressional ratification of the United States-Mexico-Canada Agreement (USMCA). This new agreement updates the current, decades-old trade deal, supporting a modernized global marketplace.
"As members of the USMCA Coalition, we are proud to have joined more than 600 associations and business groups in advocating for a stronger trade deal that will add up to $68 billion to our economy, create 176,000 jobs, and preserve duty-free market access to our Canadian and Mexican trading partners. We applaud President Trump, Vice President Pence, Senate Majority Leader McConnell, and House Speaker Pelosi for their efforts to negotiate and ratify the agreement.”
Since the creation of NAFTA two decades ago, equipment manufacturers have benefited greatly from duty-free market access to the industry’s two largest export markets, Canada and Mexico. Equipment manufacturers support 1.3 million jobs in the U.S. and 149,000 in Canada. The industry also contributes $188 billion to the U.S. and Canadian economies.
Over the past 2 years, AEM has called on both the Trump Administration and Congress to deliver an updated North American trade agreement for the 21st century. USMCA fulfills many of the industry’s goals and strengthens North American equipment manufacturing.
And one day prior, on Jan. 15, The Hill reported an initial trade deal was signed by President Trump and Chinese Vice Premier Liu He. This "Phase One" agreement between the U.S. and China would freeze the tariff escalations that have occurred over the past year, which has strained many in the U.S. economy including heavy-duty equipment manufacturers.
As part of the new agreement, China will increase its purchases of U.S. goods over the next 2 years, $77.7 billion of which will be manufactured goods and $32 billion worth of agricultural products.
AEM President Dennis Slater said after the signing of the Phase One agreement, "We applaud the U.S. and Chinese governments for agreeing to this first milestone in the trade negotiations. As the two sides continue these significant conversations, we encourage them to continue to work in good faith, reaching the second phase of negotiations and the removal of all tariffs.
"These levies hurt American equipment manufacturers, farmers, and families, and make the cost of doing business more expensive. They also make it harder to create new jobs and add to the 1.3 million jobs our industry already supports. AEM hopes this agreement will pave the way for the elimination of the remaining tariffs and increase U.S. exports to the Chinese market. As American voters look toward the November election, the economy and health of the equipment manufacturing industry is weighing heavily on their minds. Creating lasting economic prosperity and a pro-growth trade environment is paramount.”