Trade Agreements Offer Optimism, But Uncertainty Remains
On December 13, 2019, the United States and China announced a "phase one" trade agreement just before new tariffs were scheduled to go into effect.1 Six days later, the House of Representatives passed the United States-Mexico-Canada Agreement (USMCA) in an overwhelming bipartisan vote, virtually assuring enactment of the long-awaited replacement to the North American Free Trade Agreement (NAFTA).2
Both of these deals were expected to be enacted in early 2020, though details of the China pact remained unclear as of late December. The two agreements are important steps toward resolving conflicts with our three largest trading partners that had cast a pall over a generally strong U.S. economy.
While the USMCA had been on the table for more than a year, the China agreement is a wild card and more critical to addressing economic damage to U.S. manufacturing and agriculture. Leaders in both industries were cautiously optimistic, pending further details and proof that China would carry out its end of the deal.3