Behind the scenes: Troubles ahead for Trump's NAFTA replacement
About 10 days ago, a deputy to Trump's top trade negotiator gave a shockingly optimistic forecast on the political fate of the U.S.-Mexico-Canada Agreement (USMCA) — the president’s renegotiated NAFTA deal. To the bemusement of two sources on the call, C.J. Mahoney, Robert Lighthizer’s deputy, said he figured the USMCA could get through Congress with huge bipartisan support by the end of April.
Between the lines: Nobody we've spoken to on Capitol Hill thinks Mahoney's prediction is remotely possible. While the two sources on the call were impressed with his technical grasp of the trade deal, they called his comments on its political fate "naïve," saying they betrayed only a tenuous comprehension of the USMCA's troubled standing with Congress.
- Other sources who've discussed USMCA with Mahoney privately say his comments on the call don’t reflect his true opinions about the political troubles encircling the trade deal, saying that he was doing "happy talk" to keep things positive and instill a sense of urgency.
- The White House has also begun ramping up its congressional outreach.
Why it matters: Regardless of Lighthizer and Mahoney's true convictions, the USMCA — Trump's most urgent legislative priority besides government funding — has a tough row to hoe.
- Influential House Democrats say they won't even negotiate with the White House until Trump stops threatening to withdraw from NAFTA and lifts his tariffs on Canada's and Mexico's steel and aluminum.
- Meanwhile, Republicans oppose important parts of USMCA, including its weakening of the NAFTA provision that lets foreign companies sue governments for mistreatment.
What we're hearing: While the White House woos moderate Hill Democrats, the lawmakers are sending up emergency flares. Wisconsin's Rep. Ron Kind, a member of the trade subcommittee on Ways and Means, is one of those Democrats.
- Kind told me he gives Lighthizer credit for "doing a lot more outreach." But he added that, like many of his colleagues, he won't back the trade deal until Trump lifts those steel and aluminum tariffs. Retaliation for these tariffs is hurting Badger State farmers and manufacturers, he said.
- Trump, meanwhile, seems totally unwilling to budge on that point.
- "Time is of the essence," Kind said. "The later this drags into '19, or if it slips to '20, the presidential campaign is going to overwhelm things and make things so much more difficult to move forward."
The bottom line: Nancy Pelosi is the most important person here. She'll decide when the USMCA comes to the House floor. And while she's indicated she's open to Trump's trade deal, Republicans anticipate she'll use her leverage over Trump to extract something substantial (and possibly unpalatable).