The U.S. economy is humming along at a brisk pace, fueled by last year’s tax cuts, business growth and strong consumer confidence. Unemployment overall is the lowest in decades, and among minority workers it’s the lowest ever. The challenge in Washington is how to sustain this good economic performance over the long haul.
Given the natural ebb and flow of the business cycle, most economists project that the current good times could begin to fade sometime in the next two years, unless D.C. policymakers take steps soon to keep the economy growing. And two of the factors that could most positively impact this situation are trade and immigration policy. Unfortunately, in both of these areas, the U.S. is bogged down in impasses that could drag us toward recession.
When it comes to trade, the Trump administration is absolutely right to push for better deals with our trading partners. Europe’s high tariffs on U.S. autos negatively impact American carmakers. Canada’s steep duties on U.S. dairy products hurt American farmers. China’s below-cost dumping of steel and aluminum and its blatant theft of our technology have severely disadvantaged American businesses and workers. Mexico’s low wages, lax labor rules and weak environmental protections give it a patently unfair edge over American competitors.
Pressuring these countries to make fairer trade deals with the U.S. makes perfectly good sense and was long overdue. But we’re fast approaching a tipping point, at which staying locked in escalating trade conflicts could nudge our country and our trading partners into the very recession all of us hope to avoid. It’s time for President Trump and his trade advisors to close pending deals and prevent dangerous trade wars.
The deal the U.S. recently made with Mexico was a good start, and will help American automakers more fairly compete with auto plants in Mexico. This landmark agreement will level the playing field on wages, labor rules, environmental regulations and “domestic content” requirements to make it more attractive for American automakers to keep their factories in the U.S. It should serve as a model for a quick deal with Canada to stabilize our mutually beneficial trade relationship.
As soon as this North American trade reform is completed, U.S. trade negotiators should turn their attention to reaching a deal to equalize tariffs with European Union nations. And they should defuse the dangerous possibility of an all-out trade war with China that could see tariffs rise to 25 percent on both sides. If that takes a direct discussion between Trump and Chinese President Xi Jinping, it will be worth it to keep both of our economies from going over a trade cliff.
Along with finalizing these trade deals, Congress and the president should move toward resolving another issue that has the potential to become a real drag on the U.S. economy. American immigration policy has been mired in a decade-long partisan deadlock that must be broken. That’s unlikely to happen until after November’s midterm elections, but no matter which way those elections go, it’s time for action. Whether the GOP hangs on to its majority in Congress or — as is more likely — loses the House of Representatives to Democratic control, the stage should be set for an immigration reform deal.
With the nation at nearly full employment and with a rapidly aging workforce, we badly need an infusion of ready and willing immigrant workers to help fill the void. Businesses right here in New York complain of severe labor shortages that are crimping their ability to grow. Manufacturers, technology companies, tourist businesses and farmers simply can’t find enough qualified workers to fill available jobs. They are forced to deal with a crazy-quilt immigration system that too often leaves them with critical labor shortages. Immigration reform that allows a more reasonable number of workers to legally enter the U.S., combined with stronger border protections to keep illegal immigrants out, is a deal that both sides in the immigration debate should be able to strike.
It will take some real leadership to break the impasse, and a willingness on all sides to reach beyond petty political posturing. But with that needed dose of leadership and an openness to reasonable compromise, an immigration reform deal can be cut. If it’s combined with a resolution of ongoing trade differences, it could help keep the U.S. economy growing rather than faltering. That would be a good deal for everyone.
Al D’Amato, a former U.S. senator from New York, is the founder of Park Strategies LLC, a public policy and business development firm. Comments about this column? ADAmato@liherald.com.