In swing state Michigan, 2020 Democrats mostly ignore a key piece of Trump's trade agenda

Key Points
  • Democratic presidential candidates have spent little time talking about the United States-Mexico-Canada Agreement, President Donald Trump's replacement for NAFTA.
  • Only Sen. Elizabeth Warren directly mentioned the deal in Tuesday night's Democratic debate in Detroit during a broader discussion on trade.
  • Some Michigan Democrats think the party has an opening to use the deal against Trump as they argue he has not followed through on his promise to U.S. workers.
Senator Bernie Sanders, U.S. Senator Elizabeth Warren, former U.S. Rep. Beto O'Rourke and former Colorado Governor John Hickenlooper (L-R) debate on the first night of the second 2020 Democratic U.S. presidential debate in Detroit, July 30, 2019.
Lucas Jackson | Reuters

DETROIT — In a state shaped by free trade agreements, 2020 Democratic presidential hopefuls spent more time debating trade than they have at just about any point in the primary race.

During the first of two Democratic debate nights, Sens. Elizabeth Warren and Bernie Sanders slammed multinational corporations on Tuesday for moving manufacturing jobs overseas. Former Rep. John Delaney criticized Warren over a trade plan that he says would isolate the U.S. from the world. Former Rep. Beto O'Rourke, former Colorado Gov. John Hickenlooper and Montana Gov. Steve Bullock all slammed President Donald Trump's trade war with China.

But a key piece of Trump's trade agenda — one the president sees as a way to follow through on promises to Michigan, a state he narrowly won in 2016 — has gone largely untouched by Democrats on the campaign trail. Democrats have spent little time talking about the United States-Mexico-Canada Agreement, Trump's replacement for the North American Free Trade Agreement that has stalled in Congress amid Democratic opposition.

Warren took one swipe at the deal on Tuesday night, criticizing a provision that Democrats say would let drug companies charge exorbitant prices for certain products. The Massachusetts senator cited the measure in arguing that corporations use trade deals to "suck more profits out for themselves" and "leave the American people behind."

During the second night of debate Wednesday, candidates barely mentioned trade until nearly two hours in. But Sen. Kirsten Gillibrand, a New York Democrat, criticized what she called a "bad trade deal" in USMCA. New York Mayor Bill de Blasio also came out against the USMCA, which he called "NAFTA 2.0," in a broader discussion of trade.

Still, Democrats have spent little time talking about the trade deal, even as the Trump administration works with House Speaker Nancy Pelosi to ease Democratic concerns and push for the deal's ratification in the coming months. Despite the increased attention on trade Tuesday night, some Michigan Democrats think the party can do more to hold Trump's feet to the fire on the issue.

"I guess what I would say is that I think most politicians don't understand how strongly and deeply working people feel about trade policy and the impact it's had on their lives," said Rep. Andy Levin, a Democrat who represents a district north of Detroit, told CNBC on Wednesday. The congressman endorsed Warren this week in part because of her trade policy.

Ten other Democratic contenders, including former Vice President Joe Biden and Sen. Kamala Harris, will take the debate stage Wednesday night in Detroit.

Trade remains a top Trump priority

Trade ranks among the White House's top economic priorities ahead of the 2020 election. Trump is pushing for ratification of USMCA and a deal with China that would end a potentially damaging trade war. He sees the efforts as a way to follow through on his promises to boost American workers who lost their jobs after free trade deals encouraged firms to move positions overseas.

But many congressional Democrats, led by Pelosi, argue the new North American trade deal does not do enough to protect American workers. They say it lacks a strong enough mechanism to enforce standards for higher wages and stronger unions in Mexico, which would in theory make it less appealing for U.S. companies to move operations to Mexico. America's southern neighbor has already passed a labor law to address those concerns about offshoring — though Levin says companies have filed lawsuits to invalidate it.

Carl Levin, the congressman's uncle who represented Michigan in the U.S. Senate for 36 years, thinks the USMCA's shortcomings and other Trump policies give Democrats a chance to hold the president accountable on trade.

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"If they want to go after his phony trade promises and show why they're phony, they're going to have to get into the detail," Levin, a Democrat who retired from the Senate in 2015, told CNBC on Tuesday ahead of the debate.

Levin argued that, in addition to USMCA, a provision in the 2017 Republican tax law that taxes income made by U.S. companies' foreign subsidiaries at half the rate of their income at home also shows Trump has not followed through on his promises to U.S. workers. It's a message he and some local Democratic officials think presidential candidates can focus on more as they try to win back Michigan.

The Trump campaign fired back at the Democrats' criticism.

"It wasn't too long ago that Democrats admitted the failures of NAFTA, with former governor Jennifer Granholm admitting 'NAFTA' has 'given us the shafta.' Now, however, Democrats refuse to pass the USMCA, a deal that would be a clear win for the American people should Democrats in Congress do their job," Trump campaign spokeswoman Kayleigh McEnany said.

A tricky issue for swing-state Dems

It is unclear now whether USMCA will still be an open issue in November 2020. House Democrats say they have moved closer to supporting the deal following a series of meetings with U.S. Trade Representative Robert Lighthizer. Rep. Earl Blumenauer, D-Ore., who heads the House Ways and Means Committee's trade subcommittee, recently said Democrats had seen "significant progress" in talks with the White House, according to The Associated Press.

The development follows months of skepticism from top Democrats. Organized labor has repeatedly voiced concerns with the agreement. For instance, United Automobile Workers President Gary Jones argued last year that USMCA, "as it stands now, is not strong enough to protect American workers." He cited GM's decision to wind down production at facilities in Michigan, Ohio and Maryland.

Despite the opposition, the issue is a complicated one for politicians running in Michigan. Many businesses that rely on trade want the deal approved.

For instance, the agriculture industry — which has suffered from the trade conflict with China and bad weather — wants Congress to pass USMCA and put an end to uncertainty around international markets. Canada and Mexico are the second and third largest U.S. trading partners.

As a border state with Canada, Michigan relies a great deal on America's northern neighbor. The state sent nearly $24 billion in goods to Canada last year, or 41% of its total exports, according to USTR. Though it has a reputation as a manufacturing state, Michigan exports significant amounts of agricultural products such as dairy and soybeans.

Along with the fact that some groups have benefited from NAFTA and want to see Trump's replacement plan passed, the complicated nature of trade policy makes it "a difficult thing for anybody to try to describe in a sound bite or on a primary debate stage," said Kyle Handley, a professor and economist at the University of Michigan who studies trade. The changes made in USCMA "are not very substantial in the first place," which makes crafting a political message around it more tricky, he added.

Still, Andy Levin — a vocal opponent of USMCA as it stands now — thinks Democrats have a concise argument they can make against Trump's NAFTA replacement. He acknowledges it may not appeal to everyone, even in his district, but says it could resonate in places such as Michigan, Pennsylvania and Wisconsin that helped Trump win the White House.

"That NAFTA caused hundreds of thousands of good, family supporting U.S. jobs to go to Mexico and that NAFTA 1.5, or Trump's new NAFTA, will do the same. And we need to prevent that. That's it," he said. "I don't think it's that hard of a message, really."

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