Even before Donald Trump became president he confidently declared that Mexico would pay for a border wall:
Mexico will pay for the wall!
— Donald J. Trump (@realDonaldTrump) September 1, 2016
It now appears that President Trump is preparing to deliver on that promise. Two weeks ago the president signed the new United States, Mexico, Canada trade Agreement (USMCA) that will redefine – and bring more balance to – trade between the three countries once Congress ratifies it.
Just signed one of the most important, and largest, Trade Deals in U.S. and World History. The United States, Mexico and Canada worked so well together in crafting this great document. The terrible NAFTA will soon be gone. The USMCA will be fantastic for all!
— Donald J. Trump (@realDonaldTrump) November 30, 2018
The president and his negotiating team were determined to close the loophole that allowed China to use Mexico and Canada as a backdoor to lucrative United States markets.
That loophole allowed China to strip the U.S. of a large part of the $500 Billion, that goes into making the trade deficit, by shipping materials into our northern and southern neighbors and assembling the finished products there prior to shipment into the U.S, thereby avoiding tariffs.
Both Mexico and Canada benefited from this arrangement with jobs and profits. Mexico’s trade imbalance swelled to $80B under the old NAFTA treaty just as another billionaire who ran for president (1992) before it was signed and ratified, Ross Perot, predicted it would.
Faced with losing unencumbered access to the U.S. market altogether had Trump simply cancelled NAFTA, Mexico negotiated in its own self-interest.
Under the new USMCA, the loophole (wide enough to drive hundreds of billions of dollars a year through) that China exploited is now closed.
President Trump was aided in making the deal by his negotiating team consisting of Treasury Secretary Steve Mnuchin, U.S. Trade Representative Robert Lighthizer, Commerce Secretary Wilbur Ross, National Economic Council Director Larry Kudlow, and National Trade Council Director Peter Navarro.
Like the president they serve, this is a group of hard as nails negotiators. Armed with the threat of trade-killing tariffs, they weren’t afraid to take on the heavy lifting and challenge the entrenched relationships that had resulted in trillions of dollars of wealth being exfiltrated from the United States over the years.
Trump could have pulled out of NAFTA, imposed tariffs, and then the knuckle-draggers who constantly criticize his brilliance would’ve had no choice but to acknowledge that Mexico was paying for the Wall, and dearly so.
But President Trump wasn’t intent on punishing Mexico. He was simply demanding an equal playing field where American excellence wouldn’t be so handicapped that it had no chance to succeed.
To accomplish that he incentivized Mexico so that their economy could flourish and our economy could as well. Win-Win!
I often stated, “One way or the other, Mexico is going to pay for the Wall.” This has never changed. Our new deal with Mexico (and Canada), the USMCA, is so much better than the old, very costly & anti-USA NAFTA deal, that just by the money we save, MEXICO IS PAYING FOR THE WALL!
— Donald J. Trump (@realDonaldTrump) December 13, 2018
Canada, realizing that they were now isolated and facing massive tariffs of their own also acquiesced and signed onto the USMCA at the last minute.
This means that essentially, both Mexico and Canada will be paying for the wall. Those expecting a check, or a cargo place loaded with $25B in cash coming in from Mexico simply don’t understand the way these things work.
At least they won’t acknowledge that Trump’s MAGAnomics works for everyone.
Now China, the much larger target that was wrecking America’s mainstreet economy, is the odd man out.
China is now isolated from U.S. markets and, as a result, its economy suffering. This makes them much more amenable to an agreement that is no longer one-sided in their favor. Ya think?
China just announced that their economy is growing much slower than anticipated because of our Trade War with them. They have just suspended U.S. Tariff Hikes. U.S. is doing very well. China wants to make a big and very comprehensive deal. It could happen, and rather soon!
— Donald J. Trump (@realDonaldTrump) December 14, 2018