Time short on NAFTA as U.S. confronts China
WASHINGTON — President Donald Trump’s team is running out of time to rewrite a trade pact with Canada and Mexico, and America’s top trade official says the countries are still far apart.
The impasse over the North American Free Trade Agreement comes as the U.S. is confronting China and sparring with its allies over U.S. tariffs on imported steel and aluminum.
“The NAFTA countries are nowhere near close to a deal,” U.S. Trade Rep. Robert Lighthizer said Thursday. Lighthizer cited “gaping differences” on issues ranging from farm trade to labor standards to intellectual property protections.
“We of course will continue to engage in negotiations, and I look forward to working with my counterparts to secure the best possible deal for American farmers, ranchers, workers, and businesses,” Lighthizer said.
If negotiators can’t agree on a revamped North American Free Trade Agreement soon — House Speaker Paul Ryan set an informal Thursday deadline — the talks could drag into 2019. Or Trump could carry out his threat to abandon the agreement he’s labeled a job-killing “disaster” and throw commerce among the three NAFTA countries into disarray.
NAFTA is hardly the only urgent item on the administration’s trade agenda. Trump met Thursday with China’s Vice Premier Liu He to try to avert a trade war. Liu also met with a U.S. team led by Treasury Secretary Steven Mnuchin.
China has offered Trump a $200 billion reduction in its annual trade surplus with the U.S. by increasing imports of American products and other steps, a Trump administration official told Bloomberg News. The official didn’t describe the U.S. response.
The U.S. and China, locked in a conflict over Beijing’s demand that American companies turn over technology to gain access to the Chinese market, have threatened to slap tariffs on $50 billion of each other’s goods. And Trump has asked Lighthizer to find an additional $100 billion in Chinese products to tax.
The prospect of a trade war between the world’s two biggest economies has unnerved global financial markets and alarmed major companies.
In the meantime, Japan, a staunch U.S. ally, is threatening to go to the World Trade Organization to protest Trump’s tariffs on imported steel and aluminum. The president imposed the tariffs in March, arguing that reliance on imported metals posed a threat to America’s national security. He exempted the European Union, Canada, and Mexico — but not Japan — until June 1.
The steel and aluminum tariffs have antagonized traditional American allies. Donald Tusk, president of the European Council, tweeted Monday of the United States that “with friends like that who needs enemies.”