Midterm elections offer little clarity on fate of USMCA, tariff dispute

WASHINGTON — If the midterm elections were supposed to wipe clear the uncertainty of tariffs, trade and other smudges on the window into Canada-U.S. affairs, well, have a look at the bizarro world of politics in the United States of America.

A Democratic majority in the House of Representatives was “very close to complete victory” for President Donald Trump. The election is both over and not over, thanks to vote-counting disputes in Florida, Georgia and Arizona. There’s a new trade deal, but the White House and Canada are still staring each other down over steel and aluminum.

So good luck getting odds on when, or if, the new Congress will ratify the new U.S.-Mexico-Canada Agreement.

“We don’t know yet,” Ohio trade lawyer Dan Ujczo said of how new House members are likely to vote when Capitol Hill takes up USMCA, something that he fears could now be a year or more away.

Many definite Yes voters went down to defeat in the midterms, he said, including Texas congressional members John Culberson and Pete Sessions, Minnesota’s Erik Paulsen and Iowa’s David Young, among others — introducing yet another element of uncertainty into a political dynamic that seems these days to know little else. Uncertain doesn’t mean No, said Ujczo, a partner with U.S. trade and customs firm Dickinson Wright.

“They’re freshmen — are they going to get pulled in the direction of their caucus, or do they reflect the views of their voters?” he said. “There’s going to be a lot of pressure on them to vote Yes, but it takes time — and it may be time that we don’t have.”

While the hard-won agreement that emerged at the 11th hour six weeks ago after a 13-month marathon of difficult talks awaits a vote, the terms of the nearly 25year-old deal it was meant to replace will remain in effect, federal officials in Ottawa say.

Powerful Republicans who oppose tariffs, such as Iowa Sen. Chuck Grassley and Senate Majority Leader Mitch McConnell, are still around and wielding their influence, they note. So are prominent Democrats who prefer the new deal to the old one, like Senate Minority Leader Chuck Schumer and Ohio Sen. Sherrod Brown.

But those steel and aluminum tariffs are still around, too.

“There have been some highlevel discussions, but no direct negotiations,” Canada’s ambassador to the U.S. David MacNaughton said Friday of the plan to resume tariff talks with American trade czar Robert Lighthizer. “I saw Ambassador Lighthizer last week, and I said to him, ‘When you guys are ready, let’s sit down and talk.’”

MacNaughton acknowledged that the midterms might have raised more questions than they answered. But there’s little concern within Canadian circles that Congress will do anything but approve the deal, when it gets around to it.

“There is a lack of clarity right now,” he said. “But as people begin to better understand the deal, I think you’ll be surprised at the degree of support there is.”

Another paradox: one might think a weakened Republican caucus would undermine the Trump doctrine of using tariffs to extract more favourable trade terms. In fact, if those members who survived the midterms feel the need to be more closely aligned with the president, the opposite could be true.