U.S. Pivots to China, With Nafta Deal in Hand White House officials say a strong North American trade deal gives them an advantage in talks with Beijing By Bob Davis
https://www.wsj.com/articles/u-s-pivots-to-china-with-nafta-deal-in-hand-1538431208
White House officials are betting that concluding a trade deal with Mexico and Canada will give them more ammunition in their high-stakes battle with China on economic issues and national security.
A renegotiated North American Free Trade Agreement, Trump advisers argue, removes the possibility that a trade war could break out on the continent and will make North America a more attractive place for investment.
When combined with U.S. tariffs against China, which boost the costs of production there, foreign companies will start moving investment out of China, the administration calculates. That would weaken China’s ability to produce next-generation technology and put additional pressure on Beijing to make trade concessions sought by the U.S.
The U.S. will “reclaim a supply chain that has been off-shored to the world,” President Trump said at a press conference Monday.
Former White House strategist Steven Bannon said the Trump strategy from the outset was to pull investment out of China and remake global supply chains, but then the effort got thrown off track when administration deputies battled over steel and other trade issues and the U.S. launched fights with Europe, Canada and other allies.
“Nafta was the key to pick the lock on the global supply chain,” he said.
Some big technology companies have said privately that they have begun weighing whether to shift some production out of China to avoid U.S. tariffs. CONTINUE AT SITE
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