New trade deals with China, Canada and Mexico should boost U.S. economic growth about a half a percentage point in 2020, chief White House economic adviser Larry Kudlow said Sunday.
“These trade deals are going to be very helpful,” Kudlow said on Fox News’ “Sunday Morning Futures with Maria Bartiromo.“ “They will reduce uncertainty and probably pick up some important business spending. In ballpark numbers, Maria, I would say we will do half a percent better GDP in 2020 than otherwise would have been case.”
The Federal Reserve in September forecast the U.S. economy to grow 2.0 percent in 2020, down slightly from 2.2 percent this year. One big factor hanging over the economy has been the uncertainty caused by Trump’s tariff actions and his disruptive approach to trade policy.
Last week, President Donald Trump’s administration finished work on a revised North America trade deal with Mexico and Canada that has won the endorsement of House Speaker Nancy Pelosi (D-Calif.) and AFL-CIO leader Richard Trumka.
Kudlow said he expected the House to “handily” approve the U.S.-Mexico-Canada Agreement later this week, but did not give a more precise estimate of the final vote. The House Ways and Means Committee will vote Tuesday on the agreement, setting the stage for a full House vote on Thursday.
The Trump administration also reached a “phase one” trade agreement with China to address some of the concerns that prompted Trump to impose duties on more than $350 billion worth of Chinese goods. As a result, new duties that were scheduled to go into effect Sunday have been canceled, and some of the existing duties have been reduced.
China’s commitment to buy $200 billion more of U.S. agriculture, energy, manufactured goods and services products from the United States will double U.S. exports from about $180 billion annually, Kudlow said.
He also expressed hope that the agreement’s enforcement mechanism would ensure China honors the promises it has made to protect intellectual property and stop pressuring American companies to hand over valuable technology.
But, Kudlow said: “If they do violate, we will take action.“
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