Jan 9, 2019 - Politics & Policy

Grassley urges Trump to pull out of NAFTA if Democrats resist new deal

 Chuck Grassley (R-Iowa), chair of the Senate Finance Committee.

Chuck Grassley (R-Iowa), chair of the Senate Finance Committee. Photo: Erin Schaff-Pool/Getty Images

Sen. Chuck Grassley (R-Iowa) told reporters Wednesday that President Trump should "pull out" of NAFTA if the Democrat-controlled House doesn't support the renegotiated trade deal signed by the U.S., Mexico and Canada last November.

"I hope that they're smart enough not to let that happen."

Between the lines, via Axios' Caitlin Owens: As the new chair of the Senate Finance Committee, Grassley will be responsible for shepherding the deal through the Senate. Withdrawing from NAFTA would be seen as the ultimate way to force the Democrats' hand when it comes to approving the trade deal, but it's a risky move. If Democrats don't fold and there ends up being no trade agreement with Canada and Mexico, the result would be complete economic chaos.

Background: The revised deal, known as the United States-Mexico-Canada Agreement (USMCA), still has to be approved by Congress and the Canadian and Mexican legislatures.

  • USMCA contains modest changes from NAFTA, but Trump sees it as a major win after promising on the campaign trail to get rid of what he called the "single worst trade deal ever approved."
  • But as the New York Times notes, House Democrats aren't likely to want to "sign off on any deal that does not include significant changes that labor leaders and newly elected progressives are demanding. That could involve reopening negotiations with Mexico, although American and Mexican negotiators have both publicly ruled out that possibility."

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