The Senate passed a rewrite of the North American Free Trade Agreement with strong bipartisan support Thursday, handing President Donald Trump another trade victory on the same day that impeachment proceedings moved from the House to the upper chamber.
The United States-Mexico-Canada Agreement, which updated the quarter-century-old NAFTA, has long been a signature priority for the Trump administration. Its 89-10 passage came at a critical moment for the president, who faces charges of abuse of power and obstruction of Congress less than a year ahead of the 2020 elections.
USMCA was the result of months of negotiations between the Trump administration and House Democrats, culminating in rare across-the-aisle cooperation at the same time that the Senate began procedural steps in the impeachment trial of Trump.
While trade experts say the new pact may have a limited effect on the economy, it offers Trump a clear message for voters alongside a highly anticipated economic truce with China.
“I think Trump is strengthened by the deals and also with the backdrop of a strong economy with record low unemployment, wage growth, and a hot market for 401Ks,” said David Kochel, a veteran Republican strategist in Iowa.
The White House finalized the so-called phase-one deal in a several-hour long ceremony on Wednesday, portraying it as a major win for American workers even as critics questioned whether it was worth nearly two years of increased tariffs. Trump seized on growing trade optimism early Thursday as stocks continued to climb to fresh highs.
“The farmers are really happy with the new China Trade Deal and the soon to be signed deal with Mexico and Canada, but I hope the thing they will most remember is the fact that I was able to take massive incoming Tariff money and use it to help them get through the tough times!” he wrote on Twitter, referring to a program that provided subsidies to agricultural producers hurt by trade tensions.
Under USMCA, automakers have to comply with higher thresholds for the amount of car parts that must originate in North America in order to avoid tariffs. There are also changes championed by Democrats including stricter provisions on labor standards, pharmaceutical rules and enforcement mechanisms.
Despite the back-to-back trade deals, businesses still face tariffs that are unlikely to be lifted until after the November election. Those have caused particular troubles for not only farmers, but also manufacturers already grappling with a mild recession in the sector.
“The economy remains strong, which works in Trump’s favor,” said Susan Giaimo, a political scientist at Marquette University. “Yet not everyone has benefited.”
While policy-driven economic pain would typically lead to negative evaluations of presidential performance, according to Columbia University political scientist Gregory Wawro, that may not be the case for Trump.
“Overall GDP growth seems to be the best predictor of success when it comes to presidential elections,” Wawro said. “And Trump seems to be particularly adept at distracting voters from the reality of poor economic performance of some sectors at the local level.”