The Trade Deal That’s Quietly Coming Together for Trump

(Bloomberg) --

Here’s an item on President Donald Trump’s trade agenda that relies on Democrats’ help that’s progressing surprisingly well: his new Nafta, dubbed the U.S.-Mexico-Canada Agreement.

The key ingredient so far? His day-to-day outbursts against the opposition are far removed from the process, people involved in the talks say.

After weeks of discussions between Trade Representative Robert Lighthizer and lawmakers, negotiators last week put pen to paper and are now working full steam to get to a resolution on issues that House Speaker Nancy Pelosi and her caucus want changed before the agreement could come up for a vote.

House Democrats last week submitted detailed proposals for fixes to Lighthizer and his team and are now waiting for a counter offer, the people said. Democratic staff say USTR has what it needs to formulate a package to address Democrats’ concerns, putting the ball in Lighthizer’s court to find a path forward.

The proposals, which outline changes to the deal’s labor, environment, pharmaceutical and enforcement provisions, mark the beginning of what is expected to be a month of back-and-forth exchanges of paper and continuous meetings between USTR and congressional staff.

Perhaps the most surprising aspect is the fact that Trump’s increasingly hostile rhetoric towards Democrats hasn’t yet impacted the process. Pelosi has not changed her marching orders; she continues to tell staff to focus on the substance of the agreement rather than get distracted by outside noise, according to the people familiar with the talks.

Still, it’s not clear how long that approach is sustainable. The 2020 election is around the corner and it becomes more and more difficult for Democratic candidates to justify giving Trump a win on his No. 1 legislative priority.

Charting the Trade War

Declining costs of materials used by America’s manufacturers may be starting to help diminish the impact of tariffs for some as the U.S.-China trade war rages on.

Today’s Must Reads

• China stalemate | The White House is holding off on a decision about licenses for U.S. companies to restart business with Huawei after Beijing boycotted American farm products.
• Trump’s toolkit | The U.S. president’s moves to call China a currency manipulator and raise tariffs again are just a few of the tools he has at his disposal to step up pressure on Beijing.
• Germany’s slump | Exports from Europe’s biggest economy posted their steepest annual decline in three years, underscoring the plight of a factory sector hurt by trade tensions.
• Another fight | While the world focuses on the trade war between China and the U.S., a spat has been brewing between commodity giant Indonesia and the European Union.
• Ship shape | Here’s why analysts tracking the cost of moving everything from oil to crops aren’t too worried that the global trade meltdown will cause a big collapse in prices.

Economic Analysis

• Yuan expectations | Concern that China’s currency might plunge has receded, reined in by firm daily fixings.
• U.K. contraction | Britain’s GDP miss in the second quarter reflects one-time factors, and a recession is unlikely.

To contact the editor responsible for this story: Brendan Murray at brmurray@bloomberg.net, Zoe Schneeweiss

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