And finally, you can get up to speed with today’s trade news with this one-minute video.

That’s probably all for today (although I might pop back later for the close of Wall Street...)

America’s chemicals industry doesn’t agree that Nafta was a disastrous trade deal.

According to the American Chemistry Council, around 46,000 chemicals jobs depend on trade with Mexico and Canada, due to the free trade links created over the last few decades. Chemical exports to the two countries have more than tripled, from $13 billion in 1994, to $44 billion in 2018.

The ACC explains:

“The U.S. chemical sector has capitalized on duty-free trade under NAFTA ever since its inception, more than tripling U.S. chemicals exports to Canada and Mexico – from $13 billion in 1994, to $44 billion in 2018. Approximately 46,000 U.S. chemical jobs now depend on trade with Canada and Mexico. And due to the chemical industry’s early position in the supply chain, U.S. chemical manufacturers have exploited the cost savings from duty-free trade with Mexico and Canada in order to power growth throughout the supply chain and lower prices for manufacturers and consumers.”

The ACC is now studying USMCA, but has already commended the negotiators for updating Nafta (despite Trump claiming Nafta is toast).

Back in the markets, the Canadian dollar and the Mexican peso are holding onto their earlier gains against the US dollar.
Shares are still up on Wall Street too, as investors welcome the USMCA deal.

Fiona Cincotta, senior market analyst at City Index, says:

The dollar weakened against the Canadian dollar which was boosted by Canada’s freshly minted trade deal with the US. The deal with the slightly less elegant name of United States-Mexico-Canada Agreement, or USMCA, will replace the existing NAFTA and will give the US access to the Canadian dairy market while capping Canada’s car exports to its southern neighbour. Taken as a sign that the US will be open to finding resolutions to its other ongoing trade disputes the deal prompted rallies across the US markets and caused the DJIA to climb 250 points.

Donald Trump used some big numbers to describe America’s trade imbalances.... but Daniel Dale of the Toronto Star reckons they were rather too big:

<blinks>

Trump’s big press conference has descended into rancour, as reporters continue to ask about the Kavanaugh situation.

The president does say the FBI should hold a “very comprehensive investigation” into the allegations brought against his supreme court nominee, and interview anyone they want “within reason”.

So far so sensible... Unlike the moment when he jibes that one female reporter never thinks (WHAT?!).... and then accuses the entire press pack of being terribly unfair to him, and going “loco”.

Trump is now taking questions....although he’s refusing to take any on Supreme Court nominee Brett Kavanaugh.

On the negotiations, he says there were tensions with Canada’s PM, but the two sides got there eventually.

Q: Will tariffs on Canadian and Mexican steel and aluminium be lifted?

No, says Trump... not unless something can be agreed on quotas to prevent too much metal coming into the US.

That’s a blow for Canada’s steel industry, who must have hoped that USMCA would bring them some relief.

Worryingly for Brussels, Trump suggests he could soon impose tariffs on EU car imports (which would go down very badly with the US and French auto industry).

He also says he doesn’t want China to have a hard time on trade.

Here’s a clip of Donald Trump announcing the new trade deal:

Donald Trump ends his victory lap by pointing to America’s strong labour market, and the 50% stock market rally since his election.

In a warning to Beijing, Trump says it’s “too early” to hold talks with China to resolve the ongoing trade dispute.

He claims that China wants to talk “very badly”....however, China did actually warn that it wouldn’t negotiate unless Trump dropped his threats.

Getting into his stride, Trump now hits at the “babies” who claim that tariffs don’t make a difference.

We wouldn’t be standing here without tariffs, he argues.

He adds that other countries such as India have been on the phone to the White House trying to renegotiate trade deals, because they’re scared that the US will hit them with tariffs.

Once USMCA is approved, it will be a new dawn for the US auto industry and the US auto worker, continues Trump.

It will make North America a “manufacturing powerhouse”, he promises.

But he also points out that the deal hasn’t been approved by Congress, suggesting that some on Capitol Hill might oppose the deal “just because Trump likes it”.

No Trump speech is complete, it seems, without an attack on some of America’s trading partners.

And today, he turns his guns on Europe, saying it’s a privilege for them to sell goods to America.

Ditto Japan, Trump continues.. saying it’s a privilege for them to “attack the US piggy bank”.

Onto the details...

Trump says USMCA is the most modern, up-to-date and balanced trade agreement ever, with the “most advanced protections ever for workers”.

It will help US farmers and ranchers export wheat, poultry, eggs and dairy products to Mexico and Canada.

The president also singles out the provision that higher-paid workers produce a proportion of cars n the region, and the new protection for intellectual property.

Trump then thanks a string of top officials for their work on USMCA, singling out US trade representative Robert Lighthizer for special praise.

Whenever you called Lighthizer, you’d find him working in his office or another office, says Trump, hailing his work ethic.

He also says Mexico’s outgoing president Enrique Peña Nieto should get credit, calling him a “terrific person”.

Justin Trudeau got a great deal for Canada, Trump adds graciously.

Donald Trump has arrived at the podium at the White House Rose Garden to speak about the USMCA trade deal, and presumably take a victory lap....

There’s a good round-up of the key differences between Nafta and USMCA here in the Washington Post, by Heather Long.

Here’s a quick summary:

New name. Goodbye NAFTA. The new deal will be known as the United States-Mexico-Canada Agreement, or USMCA

Big changes for cars. More cars and truck parts should be made in North America.

WashPo says:

Starting in 2020, to qualify for zero tariffs, a car or truck must have 75 percent of its components manufactured in Canada, Mexico or the United States, a substantial boost from the current 62.5 percent requirement.

There’s also a new rule that a significant percentage of the work done on the car must be completed by workers earning at least $16 an hour, or about three times what the typical Mexican autoworker makes.

Trump’s victory: Canada opens up its milk market by giving a larger share to U.S. farmers and eliminating its Class 7 pricing scheme.

That means U.S. dairy farmers can probably send a lot more milk protein concentrate, skim milk powder and infant formula to Canada (and those products are relatively easy to transport and store).

Canada’s victory: Chapter 19, allowing for a special dispute process, stays intact. Chapter 19 allows Canada, Mexico and the United States to challenge one another’s anti-dumping and countervailing duties in front of a panel of representatives from each country. This is generally a much easier process than trying to challenge a trade practice in a U.S. court

On cars, Mexico and Canada get assurance that Trump won’t pound them with auto tariffs. The US administration signed “side letters” allowing Canada and Mexico can continue sending about the same number of vehicles and parts across the border free of charge, regardless of whether auto tariffs go into effect down the road. Only parts above that quota could face tariffs.
Trump’s steel tariffs stay in place (for now). Canada wanted Trump to stop his 25 percent tariffs on Canadian steel, but there’s no deal (yet)

Improved labor and environmental rights, particularly for Mexico....

For example, the USMCA stipulates that Mexican trucks that cross the border into the United States must meet higher safety regulations and that Mexican workers must have more ability to organize and form unions.

Increased intellectual property protections. There are more-stringent protections for patents and trademarks, including for biotech, financial services and domain names - which weren’t considered when Nafta was created in the 1990s.

Chapter 11, giving investors a special way to fight government decisions, is (mostly) gone. That will please critics, who say it allowed investors to sue governments and win money off the taxpayer.

Duncan Weldon of Britain’s Resolution Group also sees a theme developing....

If USMCA isn’t as ‘historic’ a change as president Trump claims, why has it been well-received in the markets?

Well, economists will be relieved that the agreement maintains zero tariffs on swathes of goods between the three countries. That removes the risk of hefty new levies that would curb demand.

But also, a pattern is emerging; the Trump White House demands major changes, gets some progress, declares a famous victory, and moves onto the next battle.

A similar result with, say, the Chinese trade talks would be welcomed by investors.....

Donald Trump is expected to speak about the USMCA deal at the White House at around 11am local time (4pm BST).

The Financial Times have helpfully flagged up some of the differences between USMCA and Nafta.

They’re not dramatic, but together they represent an evolution from the previous trade deal created in the Clinton era.

For example, new “rules of origin” will force carmakers to use more parts from the region.

A new wages condition states that a minimum input must be added in factories that pay workers at least $16 an hour. That could move some work from Mexico back to America.

There’s also now a sunset clause – stating that USMCA will expire in 16 years (Nafta ran indefinitely).

The FT explains:

The Trump administration had long demanded such a “sunset” clause. Indeed, Washington had wanted the sunset clause period to last only five years, but was rebuffed by Canada and Mexico.

Plus (as explained earlier), we have the new access to Canada’s dairy industry (a win for America), and the retention of the Chapter 19 resolution facility (a win for Canada).

More here.

Cailin Birch, senior commodities analyst at the Economist Intelligence Unit, also argues that USMCA isn’t all that different from Nafta:

She says:

“Although the details remain unclear, the broad agreement reached by the US and Canada on 30 September 30 fits with our forecast – namely, that a trilateral trade agreement would be agreed with a few changes around the margin, but that the structure of the agreement would not be fundamentally altered.

It is in all three countries’ interest that a trilateral agreement was reached - Canada and Mexico are critical export markets for US producers, and regional supply chains have become deeply intertwined since Nafta was first introduced in 1994. As a result, US businesses would have been heavily negatively affected by the dissolution of Nafta. Likewise, both Canada and Mexico will have greater bargaining power as part of a North America-wide agreement than they would have had in separate bilateral deals with the US.

The recent jump in both the Mexican peso and the Canadian dollar confirms that market fears are beginning to ease, as clarity improves over the future of North American trade policy.

However, the difficulty of the negotiations, and particularly the “divide and conquer” strategy employed by the Trump administration, is likely to weigh on North American diplomatic and political relations for the remainder of this administration.”

America’s tech sector hasn’t approved of Trump’s belligerence on trade matters in the past - particularly the tariffs imposed on China.

But today, the Information Technology Industry Council is all smiles.

ITI president and CEO Dean Garfield says USMCA is a welcome move – adding that it will build on Nafta, not just confine it to history.

Garfield says:

“Today’s trilateral agreement is a significant step toward creating a foundation for North America’s economic prosperity for years to come.

While we are still reviewing text, we’re encouraged this plan will build upon the prior economic success of Nafta and adapt it to the fundamentally digital economy in which we live through new rules on digital trade, intellectual property, and trade in goods.

We understand and appreciate that negotiators have taken their time to secure strong provisions in this agreement that will greatly advance digital trade in North America, enabling companies across industries to hire more workers, innovate more products and grow the economies in their communities.”

Political scientist Ian Bremmer argues that the USMCA deal is a genuine breakthrough, which could help president Trump force Beijing into a new trade deal too:

European stock market have all rallied today, on relief that the Nafta trade deal is being updated, not abandoned.

Shares have risen in London, Frankfurt, Paris and beyond...paving the way for a rally on Wall Street in a few hours.

David Madden of City trading firm CMC Markets says:

European equity markets have been boosted by the news that the US and Canada have struck a trade deal.

The agreement between US and Canadian trade delegates was struck just hours before the midnight deadline, and President Trump will be delighted that he managed to replace the North American Free Trade Agreement.

The Mexican component of the deal was reached in August and now that the Canadian element has fallen into place, bullish sentiment is sweeping across global markets.

Warm words from the White House....

The head of the OECD thinktank, Angel Gurría, has also welcomed the “new, modernised” trade deal between the US, Mexico and Canada.

Secretary-general Gurría says:

“The OECD has long supported open markets for trade and investment as a crucial driver of economic growth and jobs.

“Today’s announcement supports strong growth and good jobs in all three countries; it will boost the confidence of firms and investors by preserving stable and predictable rules-based trade in North America.

It will make the region more productive and more competitive internationally.”

Eurozone factories aren’t the only ones to find September tough.

Over in China, manufacturing growth ground to a halt last month, according to the latest healthcheck from Markit.

Chinese factory bosses reported that new export business had fallen at the quickest rate since early 2016, spurring them on to cut staffing levels.

This pulled the Chinese manufacturing PMI down to 50.0, a level that shows stagnation.

This will fuel concerns that Donald Trump’s trade war with China is causing economic harm.

Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group, says Chinese factories are suffering from weaker demand, adding gloomily that....

Expansion across the manufacturing sector weakened in September, as exports increasingly dragged down performance and continued softening demand began to have an impact on companies’ production. In addition, the employment situation worsened further.

Downward pressure on China’s economy was significant.”

Canada’s farmers don’t believe Justin Trudeau’s claim that the USMCA deal is “good for Canada”.

They’re deeply unhappy that American farmers will get more access to Canadian consumers, and fear it will cost jobs.

Pierre Lampron, president of Dairy Farmers of Canada, says:

Granting an additional market access of 3.59% to our domestic dairy market, eliminating competitive dairy classes and extraordinary measures to limit our ability to export dairy products will have a dramatic impact not only for dairy farmers but for the whole sector.

This has happened, despite assurances that our government would not sign a bad deal for Canadians. We fail to see how this deal can be good for the 220,000 Canadian families that depend on dairy for their livelihood.

Donald Trump may be delighted, though. He’s long criticised Canada’s swathe of protections for its dairy industry, which guarantee prices for producers and restrict milk imports from overseas.

Canadian PM Justin Trudeau told reporters that “It’s a good day for Canada,” after his cabinet backed the new USMCA deal -- even though his nation’s farmers will now face more competition from US rivals.

Jesús Seade, top Nafta negotiator for Mexico’s President-elect Andrés Manuel López Obrador, has tweeted that USMCA will provide “certainty and stability to trade in Mexico”.