Two Trade Deals – China and USMCA
This week saw big news in terms of U.S. trade with other countries. An agreement was finally reached with China in phase one of negotiations, while the U.S.-Mexico-Canada Agreement (USMCA) is imminently expected to pass through Congress.
When President Trump came into power, he began a “trade war” with China, accusing the country of taking advantage of the U.S. with unfair deals, and criticizing previous U.S. presidents for weakness when it came to negotiating with the Asian superpower. Trump imposed tariffs (taxes) on goods imported from China, and ever since, economic relations between the two countries have been tense. Talks of a trade agreement have been on and off for some time, but on December 12, phase one of a deal was reached.
Under the plan, the White House scraps the 15% duties on $160 billion of Chinese goods (clothing, computers, smartphones, and toys) and cuts some of the current tariffs on about $360 billion worth of goods in half.
With the first phase finally out of the way, Washington and Beijing can concentrate on working out the details of phase two. Analysts are skeptical that trade representatives can make it quick and painless since this part of the negotiations will focus on the meat and potatoes of talks, including intellectual property theft, currency manipulation, and industrial subsidies.
The U.S.-Mexico-Canada Agreement (USMCA) is a new trade deal between those three countries, intended to replace the old arrangement NAFTA (North American Free Trade Agreement).
Congress is expected to vote on USMCA, and it is widely thought that the current version of the deal will pass without a problem. President Trump tweeted that:
“America’s great USMCA Trade Bill is looking good. It will be the best and most important trade deal ever made by the USA. Good for everybody – Farmers, Manufacturers, Energy, Unions – tremendous support. Importantly, we will finally end our Country’s worst Trade Deal, NAFTA.”
Democrats also had a hand in negotiating the deal. One thing they wanted to ensure was that labor disputes in public and private sectors are fair to workers. This prompted Canada to intervene and help Mexico construct a similar system to theirs.
One big difference between NAFTA and USMCA is that the new agreement includes“sunset clauses,” which allow each country to withdraw from the deal with six months’ notice. USMCA also mandates that cars have to be made with 75% of parts originating within the U.S., Canada, or Mexico to be free of tariffs, aiming to boost the countries’ respective manufacturing capabilities and expand the automotive workforce. It also allows U.S. dairy farmers to export dairy products up to 3.6% of Canada’s dairy market.
The United Kingdom had a general election on December 12, and Boris Johnson was voted to continue as the nation’s Prime Minister. Johnson’s Conservative Party was given a greater majority in Parliament, while opposition parties had significant losses.
As he had previously taken over when the previous Prime Minister resigned, this was Boris Johnson’s first general election victory in the role, and his party gained 47 seats more than they had before. The election was thought to be another Brexit referendum. In 2016, the U.K. voted to leave the European Union – a group of countries in Europe that share certain political and economic rules. The E.U. has its own parliament and makes laws for all the countries in the group. Brexit is a combination of the words “Britain” and “Exit” and is the idea of the U.K. leaving the union.
The victory of Johnson and his Conservative Party is considered to be a second vote of sorts on Brexit, since his was the only major party that campaigned in favor of Brexit, while the others wanted to prevent it. Johnson is expected to enter a new stage of negotiations over how to leave the E.U.
President Trump tweeted a message of support, writing:
“Congratulations to Boris Johnson on his great WIN! Britain and the United States will now be free to strike a massive new Trade Deal after BREXIT. This deal has the potential to be far bigger and more lucrative than any deal that could be made with the E.U. Celebrate Boris!”
As Boris Johnson said before entering 10 Downing Street as Britain’s new prime minister in the early hours of the morning, “Let’s get Brexit done. But first, let’s get breakfast done.”
US Adopts the International Foot
Measurements are different all over the world. Europe and some other countries use the meters and centimeters of the metric system, China uses the “li,” while parts of England use the Imperial system. This can be confusing when traveling across the globe; it can be even more so within one country! The United States officially uses U.S. Customary Units, but the measurement of a “foot” varies slightly from state to state, with some using the International foot (exactly 0.3048 meters), others using the survey foot (approx. 0.304800609601 m), and others not specifying which is correct. The difference may seem small and can’t be detected by the naked eye, but it can make a huge difference when constructing a building or measuring long distances – the country is 28.3 feet wider when measured using the international foot, compared to the survey foot!
“We have chaos,” said Michael Dennis, a project manager for the government’s National Geodetic Survey. Geodetics is the scientific study of the Earth’s geometric shape and position in space. “This is a mess.”
According to Dennis, confusion over the length of a foot caused serious problems for infrastructure projects, including a high-speed rail in California, a bridge between Oregon and Washington State, and major delays at an airport.
While the transition from the U.S. foot to the international foot began in 1959, the Federal government has finally announced that the country will completely adopt the international foot, starting from the year 2022.