Watch Trump’s comments on the state of NAFTA ahead of last week's lunch with ag state Senate Republicans:

Invited to the lunch: Deb Fischer of Nebraska, Joni Ernst of Iowa, Jeff Flake of Arizona, Cory Gardner of Colorado, Lamar Alexander of Tennessee and Lindsey Graham of South Carolina. Adminsitration atendees included Presdient Trump, U.S. Trade Rep. Robert Lighthizer and National Economic Council Director Gary Cohn.

The takeaway: While there were fairly positive statements coming out of the meeting, we hear the conversation got tense at times with Republican Senators fully airing their concerns about the impact NAFTA withdrawal would have on ag.

Source of friction: The Trump administration's trade focus has always been squarely on manufacturing. The Hill increasingly believes the risks to ag are being ignored. The ag community and ag state members may be the last line of defense against withdrawal, which is part of the reason ag groups and farmers launched a coordinated social media campaign pushing back against withdrawal last week.

Optimism or political backslapping? Ag Committee Chairman Pat Roberts, says Trump reassured him last week that everything will be ok according to an interview he gave to Agri-Pulse: “Before I could even say Merry Christmas, Mr. President, he looked at me and put his thumb up and said, “We’re going to be all right on NAFTA,” Roberts said.


Meanwhile, on the other side of the aisle, Senate Finance Committee Democrats got a crack at U.S. Trade Rep Robert Lighthizer in a closed door meeting last Thursday. Inside U.S. Trade’s Jenny Leonard reporte that nobody left feeling particularly reassured as Lighthizer refused to take NAFTA withdrawal off the table.

She also got this hot take from Senator Claire McCaskill who seems to have the similar ag concerns to her Republican colleagues:


The NAFTA renegotiation road show travels to Washington D.C. this week. Here's the skinny on this week's "intersessional" meetings:

WHO: This round is for the issue experts and front-line negotiators. In other words, the worker bees.

WHAT: The expected discussions are on the less controversial chapters. Chapters expected to be discussed, and maybe even closed out are: technical barriers to trade. state-owned enterprises, telecommunications, and environment. In many cases, TPP provides a solid framework for these chapters to build upon, making negotiations a bit easier.

WHERE: The Mayflower Hotel in downtown Washington. NOTE: The Mayflower is a few blocks from the White House and the most centrally located negotiation spot yet in D.C. making it a ripe target for protests.

WHEN: The talks started on Saturday and are expected to wrap up on Friday.


The U.S. International Trade Commisssion (ITC) last week put to rest any doubt, and locked in final duties on Canadian Softwood lumber entering the U.S, the most recent chapter of the long-running dispute between the U.S. and Canada.

The decision means that most Canadian lumber producers will have to pay a combined duty of a little more than 20%, which accounts for countervailig duties and anti-dumping penalties.

Canada is already challenging the duties both through NAFTA dispute resolution and through the World Trade Organization.

Members of Congress, on the other hand are clearly pleased: “With today’s unanimous decision from the International Trade Commission, help is finally on the way," Finance Committee ranking member and lumber state Senator Ron Wyden said last week.

Backgrounder for those not following the dispute: The U.S. lumber industry has long accused the Canadian lumber industry of being illegally subsidized. The Canadians, on the other hand, dispute the U.S. claims and have argued their lumber is needed to meet U.S. domestic demand. For decades there have been agreements that have allowed Canadian lumber in provided that certain price levels or other limits were maintained. The last agreement between the U.S. and Canada on this issue, however, expired in 2015. Now the U.S. industry has successfully sought to re-impose duties on Canadian lumber imports.


Christine McDaniel, a former White House economist and Treasury official explains one provision that small businesses, e-commerce platforms, and express shippers all see as an opportunity in NAFTA re-negotiations in a Wall Street Journal op-ed last week.

"The de minimis threshold is a valuation ceiling governments set on imported goods. Shipments costing over that amount are subject to duties, taxes and clearance procedures. The U.S. has one of the highest thresholds in the world, at $800, which is beneficial to American consumers and other countries that want to export goods to the U.S. But the duty-free thresholds vary widely. China’s is as low as $8, Canada’s around $20, and Mexico’s $300. A U.S. business selling a new gadget for $50 would need to pay a duty on an order from Canada or China, and the company faces entirely different taxes, regulations and trade policies in each country....Removing these barriers and encouraging other countries to raise the duty-free threshold are two places for Mr. Trump and his trade team to begin making headway for small businesses in the global marketplace."

Senators and Governors have also gotten aboard the raising de minimis train in NAFTA as well.


Last week saw the departure of Acting Ex-Im Chairman Charles J. Hall, an Obama holdover. For most Ex-Im watchers Chairman Hall's departure was just a precursor to the larger drama that lies ahead. That's because the Senate Banking Committee is expected to vote next week on the nomination of Scott Garrett, President Trump's controversial pick to replace Hall, along with four other nominees to fill out the bank's board. The Wall Street Journal's scene setter on next week's big Committee vote is HERE.


Serial it is not, but for those who want can't get enough trade news, a quick plug for the Peterson Institute's Trade Talks. Every week, Soumaya Keynes from The Economist and Chad P. Bown of the Peterson Institute do a fairly quick (usually around 20 minutes) dive into a trade issue getting headlines. Along with this newsletter, a great way to stay up to speed.

Prepared by Matt McAlvanah ( and the Monument Trade Team

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