OTTAWA — Mexico’s Congress will be asked to approve a major labour-reform bill this spring as a necessary step to ratifying the new North American free-trade pact later this autumn, say Mexican officials.

But unless the Trump administration lifts the punishing tariffs it has imposed on Mexican steel and aluminum imports — duties it also imposed on Canada — Mexico is prepared to keep the status quo with the 25-year-old North American Free Trade Agreement.

The push to improve workers’ rights in Mexico was a key priority for Canada and the United States during the rocky NAFTA renegotiation because they wanted to level the playing field between their workers and lower-paid Mexican workers, especially in the auto sector.

When Mexico and the U.S. reached their surprise bilateral agreement last August, forcing the Trudeau government to quickly forge a deal with the Trump administration, Foreign Affairs Minister Chrystia Freeland lauded Mexico for making labour concessions.

But a senior trade official in the new government of socialist reformer Andres Manuel Lopez Obrador suggested in an interview it wasn’t a huge sacrifice because elevating the status of country’s workers was a key plank in the platform that brought their Morena party to power.

Lopez Obrador made it clear in his election campaign that he wanted to strengthen the rights of workers and labour unions, which made a good fit with Canada’s bargaining position, Luz Maria de la Mora, Mexico’s deputy trade minister, said in an interview.

“With the agreement or without the agreement, this is something central to President Lopez Obrador — strengthening workers’ rights and strengthening trade deals in Mexico,” said de la Mora.

She said the new government wants a package of labour reform ratified in Mexico’s Congress before its April 30 adjournment “so we can reflect the commitments that we’ve made under the new U.S.-Mexico-Canada agreement in domestic legislation.”

That means the new agreement will be sent to the Mexican Congress for ratification after it reconvenes in Sept. 1, she said.

But that won’t happen unless the United States lifts its so-called section 232 tariffs on steel and aluminum exports, said de la Mora.

U.S. President Donald Trump imposed tariffs of 25 per cent on steel and 10 per cent on aluminum from Mexico and Canada, using the controversial national-security clause in U.S. trade law — “Section 232,” as it’s called in shorthand — that both countries say was illegal.

Canadian Transport Minister Marc Garneau recently told Trump’s top economic adviser, Larry Kudlow, during a public panel in Washington that the tariffs are “a serious impediment to us moving forward on what is the best trade deal in the world.”

On Nov. 30, Prime Minister Justin Trudeau, Trump and former Mexican president Enrique Pena Nieto, who was on his last day in office, signed the new trade agreement. It now faces ratification by the legislatures of all three countries.

Trudeau spoke to Trump on Thursday and “raised the issue of steel and aluminum tariffs and expressed the need for the removal of tariffs,” the Prime Minister’s Office said.

Canada has been clear from the outset that the tariffs “are illegal and unjustified,” said Adam Austen, a spokesman for Freeland.

“Now that we have concluded our NAFTA negotiation with the United States, we believe it is all the more reason for the U.S. administration to lift its tariffs,” Austen said Sunday, although he did not say specifically whether the issue would lead to a delay in ratification.

If the tariffs aren’t lifted, de la Mora suggested Mexico is fine with the current version of NAFTA that remains in force.

“We hope to have this new agreement in place. But in the absence of the new agreement, we know that NAFTA is good enough,” she said.

Mexico would prefer the updated agreement “for the relations we have with the U.S. and Canada but we are OK with the current NAFTA.”

Mexican senators, who were in Ottawa the past week to conference with their Canadian parliamentary counterparts, echoed de la Mora’s assessment.

“We are going to approve it, but right now our government is trying to deal with this (the tariffs),” Sen. Antares Guadalupe said in an interview.

“We’re not in a rush. Trade right now, it’s working,” she added. “We have many things to do but we want to take it slowly because it is very important to have it in a very good way for Mexico.”

Sen. Hector Vasconcelos, the head of the Mexican Senate’s foreign-affairs committee, said the ratification of the new agreement is also subject to the domestic political situations in all three countries. That includes the ongoing turmoil in the Trump administration and Canada’s legislative clock, which will see the House of Commons adjourn in June until after the October federal election.

Asked what happens if the new agreement is not ratified, Vasconcelos laughed.

“Life goes on, I assure you,” he said, referring to the current NAFTA. “It’s good enough and we will try to get it better. That’s what we are going to do. We have to discuss a lot in Mexico.”

Wall Street is rising today on optimism a trade deal between China and the US is close. The US President is feeding that optimism. The S&P500 is up +0.4% in afternoon trade. This follows Shanghai yesterday that was up +5.6% and Hong Kong, up +0.5%. That Shanghai rise is eye-popping and since the start of 2019, their index is up a remarkable +20.1%. Remember however, that index dropped more than -25% in 2018 so even after today’s big rise it is still -10% in the hole.

The final sticking points in the trade deal seem to be ‘enforcement’ mechanisms.

In the US, February car sales are expected to be about -1% lower than the same month a year ago.

US wholesale trade disappointed with sales levels in December up only +1.0% year on year, but giving up some of that gain from November. Further, wholesale inventories rose and at a quickening pace and are up +7.3% from December 2017. This is not a good sign.

Bucking the trend on a regional basis, the overall Dallas Fed activity index was up even as new order data halved.

In Mexico, their economy slowed sharply in the fourth quarter of 2018 as a drop in industrial production largely cancelled out good gains in services and rural production. Full year 2018 growth was +2.0% with little contributed in the final quarter.

In China, in something of a double-take Kafka moment, their banking regulator is saying they have achieved their structural deleveraging targets.

In Australia, according to CoreLogic there are 115,000 houses currently listed for sale across the country, a level +15% higher than this time last year. But sale volumes are down -15% nationwide, but that figure increase to more than -20% in the big markets of Sydney and Melbourne.

And staying in Australia, their opposition Labor Party has said it will follow New Zealand and require real estate agents, accountants and lawyers to be subject to anti money laundering laws – if they win in the May general election.

The UST 10yr yield is at 2.68% and a rise of +3 bps. Their 2-10 curve has held at just under +17 bps. The Aussie Govt 10yr is up +1 bp to 2.11%, the China Govt 10yr is up +3 bps to 3.18%, while the NZ Govt 10 yr is down -3 bps at 2.18%.

Gold is a little softer, down -US$2 at US$1,326/oz.

US oil prices are sharply lower today, now just over US$55/bbl while the Brent benchmark is down to just under US$65/bbl.

MEXICO CITY (Reuters) – Mexico’s state-oil company Pemex burned through $665 million at its fertilizer unit, ignored consultants and made high-risk investments with no discernible business strategy, according to a devastating government audit of its 2017 operations.

The report, published late on Wednesday, offers insight into how Pemex ended up creaking under $106 billion of debt during the six-year term of former President Enrique Pena Nieto.

Mexico’s Federal Audit Office (ASF) used unusually frank language in its assessment of Pemex’s use of public resources, particularly with regard to the company’s fertilizer subsidiary and a failed power generation unit.

The fertilizer company suffered net losses of $665 million in 2017, and its assets were worth $1.1 billion less over the course of the year.

“It destroyed value,” read the assessment, the last of three reports by the audit office on the state of government finances in 2017.

Pemex did not immediately respond to a request for comment.

President Andres Manuel Lopez Obrador has vowed to revive Pemex by clamping down on over-spending, rampant fuel-theft and corruption, but ratings agencies and investors are wary that expansive plans to revamp Mexico’s refineries could further weigh on finances.

Fitch downgraded the company’s credit rating to one notch above junk last month.

David Colmenares, who has headed the ASF since before last year’s election, told Reuters the results showed Pemex needed to be “re-engineered” to revive its finances.

“We believe that if we resolve many of these points, we will be able to recover (Pemex’s) finances,” he said.

He acknowledged corruption in the company, citing examples of contracts given to recently-created companies with no energy experience.

BAD BUSINESS

Many of the problems at Pemex Fertilizers, a subsidiary created under Pena Nieto’s liberalization of the energy sector, stem from its purchase of two fertilizer plants in 2013 and 2016, the report said.

Both plants had previously belonged to Pemex before being privatized in the 1990s by Pena Nieto’s Institutional Revolutionary Party (PRI).

The first plant, ProAgro, was not operational when Pemex bought it back for $475 million. Despite three attempts to revive it, the plant was still not up and running this year, the report said. The second plant, Fertinal, operated well below capacity, the report said.

Before the purchase, international auditors including PWC, warned Pemex’s board of directors of the parlous state of the two plants, but the company went ahead and bought them anyway, the report said.

Similarly, Pemex created a new power generation unit, called Pemex Cogeneration and Services, in 2015, without the board of directors being presented any evidence or studies to show it could be a profitable business, or seeing a business or operation strategy, the report said.

Without any infrastructure to generate electricity, the company lost $19 million in 2017. Pemex closed the unit the following year.

Wilbur Matthews, founder of Texas-based Vaquero Global Investment, called Pemex’s business decisions during the 2013-18 period “completely incongruous.”

“The way that they were conducting business in the past six years did not make any sense at all,” Matthews said.

During Pena Nieto’s term, Pemex took on an additional $47 billion in debt, citing the deterioration in finances and commitments to keep up investment levels at a time when the oil prices collapsed.

Shamaila Khan, director of emerging market debt strategies at AllianceBernstein, which has $550 billion of assets under management and owns Pemex bonds, blamed the company’s problems on the federal government charging it too much in taxes.

“The real issue is that the sovereign has taken a lot of money out of Pemex,” she said.

Khan said the company’s management had improved in the last years of Pena Nieto’s government.

“The decision to do energy reform, to reduce the burden of expenditures for the company and to try and stabilize the company were actually good decisions from a management perspective.”

A union declared total victory in a mass strike by about 25,000 workers at 48 assembly plants in a Mexican border city, but the movement spawned a storm of wildcat walkouts Monday at other businesses.

The Industrial Workers and Laborers’ Union won 20 percent wage increases at all 48 “maquiladora” factories in Matamoros, across the border from Brownsville, Texas. It also won a one-time bonus of about 32,000 pesos, about $1,685 at current exchange rates.

Now workers at about a dozen non-union businesses as well as factories organized by other unions have started wildcat walkouts to demand the same increases, known colloquially as “20/32.”

The Tridonex auto parts company said in posts on its Facebook page Monday that pickets had prevented employees from entering its Matamoros plant and it cancelled some shifts. Video showed workers outside the plant chanting “20/32!”

The local maquiladora association, known as Index, said that all the plants in the association had signed labor contracts as of last week and that none of the businesses affected by the wildcat strikes are members.

Javier Guerrero, a Matamoros public relations specialist who has been active in strike support work, said the example set by the first round of strikes has spread to local businesses, many of which are not maquiladoras, which assemble products for export to the United States.

Supermarkets, bottlers and a milk company in Matamoros were reportedly hit by walkouts.

“In the past week, the strike wave has spread beyond the factories to supermarkets and other employers, with all the workers demanding “20/32,” said the AFL-CIO, which has sent a delegation to support the striking workers.

The mass strike erupted after President Andres Manuel Lopez Obrador decreed a doubling of the minimum wage in Mexico’s border zones, apparently unaware that some union contracts at the maquiladora plants are indexed to minimum wage increases.

While other Mexican cities don’t have the same contract clauses, for workers often making less than $1 an hour, the appeal of a pay raise and bonus has proved irresistible.

“Just as happened in Matamoros, it (the walkouts) spread to other companies and unions. It is very probable that it will spread to other cities, at least within the border area,” Guerrero said.

There has been a generalized upsurge in Mexico’s long-dormant labor movement since Lopez Obrador took office Dec. 1, something the president doesn’t appear to have planned on or encouraged. Lopez Obrador has simply promised to keep the government out of unions’ internal affairs and allow for free and fair union elections.

For a union movement kept in check for decades by pro-company union bosses allied with the former ruling Institutional Revolutionary Party, the promise of union democracy has been enough to spark a revival.

But there has already been a backlash.

“In the past week, as many as 2,000 strike leaders have been fired and blacklisted, despite legal prohibitions and non-reprisal agreements signed by the employers,” said the U.S. union delegation, which included representatives from the AFL-CIO, United Auto Workers and United Steelworkers.

“The Mexican and U.S. governments must both demand that these U.S. companies honor their agreements and stop firing and blacklisting these courageous workers,” said Texas AFL-CIO Secretary-Treasurer Montserrat Garibay.

Meanwhile, Lopez Obrador has been struggling with the most radical and intractable union in Mexico, the CNTE teachers’ union, which has blocked railroad lines in the western state of Michoacan on and off for the last month.

The teachers lifted most blockades last week but on Monday they briefly re-established a protest camp on a line operated by Kansas City Southern de Mexico.

KCSM reported that by late Monday, the camp had been removed and the line re-opened. But the company said that during 28 days of blockages, 414 trains were prevented from running and 3.5 million tons of freight was stalled.

The teachers initially started the blockages to demand back pay, but they kept blocking rail lines even after they were paid.

Mexico City – More than 25,000 Mexican workers at dozens of factories south of Brownsville, Texas, went on strike Friday after owners of the plants that assemble for export refused union demands for a 20 percent pay hike and an annual bonus.

The Union of Maquiladora Industry Industrial Workers of Matamoros, the SJOIIM, said that by late Saturday nine companies had agreed to meet the salary and bonus demands.

Union leader Juan Villafuerte thanked union members who had stood outside in the rain and cold, noting “we hope to soon conclude this labor action.”

The government of Tamaulipas state said at least one company announced plans to leave the city of Matamoros. The state’s development office said other companies had halted expansion projects.

The strikes affect factories that make auto parts, medical equipment, plastics and other goods.

The labor strife comes on the heels of President Andres Manuel Lopez Obrador’s promise to double the minimum wage in communities along the U.S. border to 176.2 pesos a day, the equivalent of $9.28 at current exchange rates.

However, workers who were making more than minimum wage in Matamoros factories would not have benefited from the hike in the minimum wage, sparking discontent.

The workers are also demanding a one-time bonus of about $1,685.

The new border minimum wage is higher than the prevailing minimum in the rest of the country, about $5.35 per day. However, the cost of living along the border is much higher than in the rest of the country.

Chattanooga, Tennessee-based truckload and full-service freight transportation provider U.S. Xpress recently announced that it plans to formally divest its U.S.-Mexico cross-border investment. The company said that this move is part of ongoing capital allocation and profit improvement efforts.

And it explained that this initiative is expected to reduce current and planned invested capital by roughly $40 million, and also improve its consolidated operating margin, and provide customers with continued access to cross-border service through what it described as a variable cost alternative.

“As part of our ongoing initiatives to improve profitability and enhance shareholder returns, we evaluated our aggregate investment in our U.S.-Mexico operations, including investments south of the border, in Laredo, Texas, and in U.S. assets and personnel required to service this business,” said Eric Fuller, U.S. Xpress president and CEO, in a statement. “We concluded that these operations required a comparatively high level of fixed investment per unit of revenue and created lane inefficiency in the U.S., because serving freight to and from the border did not maximize revenue per mile or meet our other network planning priorities.

Fuller added that in 2018, the combined Mexico and allocated U.S. operations failed to keep pace with improvements in the company’s U.S. OTR (over-the-road) and Dedicated truckload operations. And the company’s to exit this operation was identified as a relatively high return, simple execution initiative.

“This strategic decision reflects the latest step in the Company’s transformation as we methodically evaluate our capital allocation, improve our operational execution, and target industry-leading profitability,” explained Fuller.

The U.S. Xpress cross-border business unit is comprised of 95% equity ownership in Xpress Internacional S.A. de C.V., which includes fixed United States-based investments, including: a trucking terminal in Laredo, Texas; roughly 700 incremental dry van trailers; and tractor capacity allocated toward serving freight to and from the U.S.-Mexico border. U.S. Xpress said this cross-border business generated around $50 million in revenue, but insignificant operating income, in 2018, including the allocated costs of its U.S. investments and personnel.

In November 2012, U.S. Xpress purchased a 90% interest in Nuevo Laredo, Mexico-based Xpress Internacional, who provides border crossings and truckload transportation of U.S. Xpress trailer equipment throughout Mexico. U.S. Xpress and Xpress Internacional had been involved in a joint venture, which was established in 2007, thorough the time of that purchase.

U.S. Xpress said at that time that its partnership with Xpress Internacional has grown to become a lead provider for gateway to and from north and central Mexico and the U.S., with more than 200 daily border crossings through Laredo.

A company executive told LM in November 2012 that U.S. Xpress’s partnership with Xpress Internacional was the culmination of a partnership of everything it has been working towards by putting a long-term business plan in place to take on controlling interest of that business.

What’s more, the executive said the collaboration has been very positive for U.S. Xpress and its customers going back to 2007, having filled a solid need its customers had and on the way to becoming about a $120 million business unit for U.S Xpress at that time. And when totaling both the U.S. and Mexico revenues U.S. Xpress generated at the time of that announcement, the executive said it was about two-thirds U.S. and about one-third Mexico and is a service that had been well-received by its customers.

In its announcement this month, U.S. Xpress said it made the decision to exit its fixed cost investment in the cross-border business and also sold off its Mexican entity to the existing managers. And it also noted that the operational transition should be finalized next quarter, with the various facets of the exit expected to take place in the coming months, including:

1. the sale of the company’s 95% equity ownership of Xpress Internacional S.A de C.V., for an estimated $4.5 million in cash and an additional $8.5 million in cash to be received over 8.5 years. The equity sale has been completed;
2. the closing and sale of the company’s trucking terminal in Laredo, Texas, and disposition of approximately 700 dry van trailers allocated toward the Mexico business as these trailers complete the transition phase. The terminal is valued at an estimated $7.0 million, and the trailers had been slated for replacement over the next two years at an estimated cost of $20.0 million. This operational transition is anticipated to be completed during 2019; and the
3. repositioning approximately 300 domestic tractors from loads to and from the border to more profitable loads through network optimization over a transition period, while continuing to offer customers ongoing access to cross-border service on a variable cost basis through relationships with its former partners, anticipated to be completed in the first half of 2019

Stifel analyst Dave Ross wrote in a research note that U.S. Xpress’s decision to exit its U.S.-Mexico cross-border trucking business was driven by an objective to improve margins and avoid throwing more money into the low-return operation,” and also “provides the company with additional U.S. network density, improved focus on its core U.S. operation and higher cash flows.”

Karl Marbach GmbH & Co. KG, the German manufacturer of cutting dies and thermoforming tools for packaging, is opening a Marbach Die Supplies subsidiary in Querétaro, Mexico, this month.

The 5,000-square-foot facility, Troqueles Marbach de Mexico, is the company’s first location in Mexico. The warehouse and sales and service offices employs five people.

Other plans for 2019 include an expansion of Marbach’s facility in Kielce, Poland.

In business news, the biggest event for the Heilbronn, Germany-based company will be a new ERP system (enterprise resource planning). The company also will focus on what officials call future security — optimizing thermoforming tool technology for a more efficient setup process. Automation also will be highlighted.

Marbach has become more global since its worldwide expansion began in 1984. Today, Marbach has 20 subsidiaries around the world. In 2018, Marbach die-cutting started a joint venture in China, with Masterwork Group Co., called Marbach Masterwork (Tianjin) Cutting Tools Co.

MEXICO CITY — President Andres Manuel Lopez Obrador launched an ambitious plan Saturday to stimulate economic activity on the Mexican side of the U.S.-Mexico border, reinforcing his country’s commitment to manufacturing and trade despite recent U.S. threats to close the border entirely.

Mexico will slash income and corporate taxes to 20 percent from 30 percent for 43 municipalities in six states just south of the U.S., while halving to 8 percent the value-added tax in the region. Business leaders and union representatives have also agreed to double the minimum wage along the border, to 176.2 pesos a day, the equivalent of $9.07 at current exchange rates.

Lopez Obrador, who took office on Dec. 1, said the idea is to stoke wage and job growth via fiscal incentives and productivity gains. U.S. President Donald Trump has repeatedly complained that low wages in Mexico lure jobs from the U.S. Mexico committed to boost wages during last year’s negotiations to retool its free trade agreement with the U.S. and Canada.

Speaking from Ciudad Juarez, a manufacturing hub south of El Paso, Texas, Lopez Obrador said Saturday he agrees with Trump that Mexican wages “should improve.” He decried, for instance, that Mexican auto workers earn a fraction of what their U.S. counterparts take home, topping out at just $3 an hour versus a typical wage of $23 an hour in the U.S.

Yet the economic plan comes at a delicate moment for the border region. Trump threatened as recently as last week to close the U.S.-Mexico border “entirely” if Democrats refuse to allot $5.6 billion to expand the wall that separates the two countries.

Economy Minister Graciela Marquez noted Saturday that the border region targeted for economic stimulus accounts for 7.5 percent of Mexico’s gross domestic product. And in recent years, she said, the 43 municipalities included in the plan have boasted combined economic growth of 3.1 percent, above the national average of 2.6 percent for the six years through 2017.

Much of that robustness owes to trade and proximity with the U.S., the world’s biggest economy.

“We have to take advantage of this locomotive that we have on the other side of the border,” she said.

Marquez expressed optimism that the stimulus plan will direct more Mexican and foreign investment into the border region. The plan for the border region is part of what Lopez Obrador calls “curtains of development” to shore up different corridors of the country so that Mexicans stay rather than migrating in search of better economic prospects. — 

Dec. 31 (UPI) — A new 11-nation trade deal — replacing the controversial and ill-fated Trans-Pacific Partnership — has taken effect without the United States.

President Donald Trump withdrew the United States from the TPP last year as he broke from Obama-era trade practices. Its replacement, the Comprehensive and Progress Agreement for Trans-Pacific Partnership, was ratified and took effect Sunday.

The free trade pact was signed by Australia, Canada, Japan, Mexico, New Zealand, Singapore and Vietnam. Four other countries, Brunei, Chili, Malaysia and Peru, are expected to sign-on soon.

“The opportunities are vast, from more Victorian wine and cheese being enjoyed on the slopes of Whistler, Canada, to more New South Wales prime beef being served up in Japan’s world-class restaurants,” Australian Trade Minister Simon Birmingham said.

Trump said joining the deal wouldn’t have been good for the United States because it increases the trade deficit and sends jobs oversees. The final CPTPP agreement retains all but 22 of the more than 1,000 provisions in the original TPP, led by former President Barack Obama.

Under the new deal, Japanese tariffs on Australian beef will be cut 27.5 percent, making U.S. beef less competitive.

“The U.S. beef industry is at risk of losing significant market share in Japan unless immediate action is taken to level the playing field,” National Cattlemen’s Beef Association President Kevin Kester said.

Japanese wheat imports from Canada and Australia will also fall in price (about 7 percent) under the CPTPP, putting more pressure on American farmers. U.S. Wheat Associates President Vince Peterson said the price disadvantage could be as high as $14 per metric ton, and the industry faces an “imminent collapse” in Japan.

“I’ve never seen such nervousness in the U.S. business community as I see now,” consultant Steve Okun, senior adviser at McLarty Associates, told CNBC. “There’s a sense that “the world is moving forward without us.”

Trump has been pressuring Japan for a new free trade deal with the United States.

The United States-Mexico-Canada Agreement preserves and modernizes much of the North American Free Trade Agreement, according to a analysis from Rice University’s Baker Institute for Public Policy.

If approved by all three countries, the USMCA will continue to allow North American manufacturers to compete effectively with Europe and Asia, preserving key aspects of an agreement that governs the trade of about $1.2 trillion of goods and services, wrote David Gantz, the author of the brief and fellow in trade and international economics at the Baker Institute.

The trade pact was signed in November at the G-20 Summit in Buenos Aires. It could go into effect as soon as Jan. 1, 2020, which would bring to an end the “chilling effect” on investment and hiring generated by two years of uncertainty over NAFTA’s future, Gantz wrote. The trade dispute settlement mechanism survived, and Mexico’s auto industry will probably survive “mostly intact.”

NAFTA was 25 years old and badly in need of modernization, according to Gantz’s analysis. The USMCA will include new provisions on data, e-commerce, labor and the environment, all of which were lacking in NAFTA, according to Gantz. Many of the USMCA innovations reflect the Trans-Pacific Partnership that was rejected by President Donald Trump in 2018. In a first for a trade agreement, the USMCA incorporates measures to guard against currency manipulation.

Differently from NAFTA, the USMCA has been criticized for its automotive rules of origin and rules about dispute settlement, but Gantz wrote that these are not the only provisions taking a step backward. Among these are Mexico’s explicit right to change its hydrocarbon laws at any time, essentially allowing President Andrés Manuel López Obrador to, if he desired, re-establish a national petroleum monopoly; U.S. steel and aluminum tariffs and retaliatory tariffs by Canada and Mexico will stay in effect; and the ability of the U.S. to back out of the agreement with six months of notice if Canada or Mexico negotiated a trade agreement with a nonmarket economy.

“Mexico could benefit from a higher North American content requirement for auto production if some current Chinese production is shifted to Mexico,” Gantz wrote. “Still, if the major threat to the U.S. economy in the future is China, a robust North American economy, which will be preserved by the USMCA, becomes critical.”