WASHINGTON -- President Donald Trump on Monday touted a new North American trade agreement as not only a victory for U.S. companies and workers, but also validation of an aggressive policy approach built on threatening trading partners with tariffs to exact concessions.
Recent tariffs on steel and aluminum imports -- as well as the threat of tariffs on autos and higher duties on all goods if the U.S. exercised its right to terminate NAFTA -- got Canada's and Mexico's attention, forcing them to make concessions, Trump said in a televised address from the White House's Rose Garden to promote the new U.S.-Mexico-Canada Agreement.
The replacement for NAFTA would raise the threshold for regional content in autos crossing North American borders duty-free and add stricter labor standards in the auto trade, including a minimum wage for some products. Canada, which has long supported the labor provisions as a way to defend against the flight of factory jobs, agreed to open up its market further to U.S. dairy products.
"Without tariffs we wouldn't be talking about a deal," the president said, comparing lawmakers and others who feared tariffs would backfire to "babies" lacking the stomach to confront trading partners that don't provide reciprocal market access to U.S. exports.
Trump said tariffs also provide negotiating leverage in other trade disputes.
"Because of the power of tariffs, in many cases, we won't even have to use them," he said. "And in many cases, countries that are charging massive tariffs are eliminating them."
In the past two months, he said, the European Union, Japan and India have reached out to the U.S. to start negotiations designed to address their respective trade surpluses with the U.S.