Trump’s new threat to NAFTA partners: give better deal or face tariffs,
TRUMP’S NEW THREAT TO NAFTA PARTNERS: GIVE BETTER DEAL OR ELSE FACE STEEL TARIFFS
Even before President Trump has formally imposed tariffs on steel and aluminum imports he is already using them as a bargaining chip in the bogged-down talks to renegotiate the North American Free Trade Agreement.
Trump has frequently threatened to withdraw from NAFTA if the pact’s partners, Canada and Mexico, don’t accede to U.S. demands for a more favorable deal.
But on Monday, the president suggested Canada and Mexico could avoid the new planned tariffs if they made concessions in negotiations to rewrite the quartercentury-old agreement. The three sides wrapped up the seventh round of talks Monday with little progress expected on the key sticking points.
“Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed,” Trump tweeted. “Also, Canada must treat our farmers much better. Highly restrictive. Mexico must do much more on stopping drugs from pouring into the U.S. They have not done what needs to be done. Millions of people addicted and dying.”
Trump said last week that he would levy 25 percent tariffs on imported steel and 10 percent on aluminum, but he provided few details during what appeared to be off-the-cuff remarks in response to a reporter’s question near the close of a meeting in the White House between Trump and steel and aluminum manufacturing executives.
The president’s announcement surprised much of his own staff and drew immediate fire from Canada and other governments, as well as Republican lawmakers and businesses that use those metals. A formal announcement on the duties was promised for this week.
Trump has responded by brushing aside criticisms of a potential trade war, and on Monday seemed only to stiffen his resolve on the metals tariffs.
“No, we’re not backing down,” Trump said in answering a reporter’s question about tariffs. “We had a very bad deal with Mexico, we had a very bad deal with NAFTA.”
“Right now, 100 percent, but it could be a part of NAFTA,” he said, opening the door to the possibility that Canada and Mexico could be exempted from the tariffs.
Trump said the U.S. had been “ripped off” by other countries on trade. “We lost $800 billion on trade … we are going to take care of it.”
Over the weekend, the president’s trade adviser Peter Navarro, who has been the administration’s spokesman on the tariffs, told Fox News that Trump’s announcement was for acrossthe-board duties. “That’s the direction it’s heading,” he said. And Navarro said on CBS News that “we expect probably by the end of the week that these will be signed,” after they have been reviewed by legal staff.
The administration is justifying the tariffs on the grounds that a surge of imported steel and aluminum present a threat to the country’s national security.
Trump has made revamping America’s trade policies a key part of his economic platform, and administration officials have been in talks with their Canadian and
Mexican counterparts to revise NAFTA since last August in an attempt to reverse merchandise trade deficits with both countries. The three parties have made some progress, although several major issues remain unresolved, including rules on automobile content and government procurement.
Canada is the No. 1 exporter of steel and aluminum to the United States, and Mexico ranks among the top five.
In linking the proposed metals tariffs with NAFTA, Trump apparently meant to apply pressure on negotiators, but analysts said the tactic was likely to be counterproductive.
“It’s another attempt to bully,” said William Reinsch, a veteran trade expert and senior adviser at the Center for Strategic and International Studies in Washington.
“They won’t buy it and it doesn’t make any sense,” he added. “It’s two separate things. There’s no conjunction in timing.”
The metals tariffs may be imposed this week or next, the White House has indicated, but Reinsch and other analysts expect the NAFTA renegotiations to drag on for some months. Moreover, the talks could get held up for political reasons as the Mexican presidential elections approach this summer, and then the midterm election in the United States.
Canadian officials already have made clear their opposition to the planned tariffs, calling them “absolutely unacceptable.”
On Monday, Ildefonso Guajardo, Mexico’s economic secretary and its chief NAFTA negotiator, responded to Trump’s latest pressure with a measured tweet of his own:
“Mexico shouldn’t be included in steel & aluminum tariffs. It’s the wrong way to incentivize the creation of a new & modern NAFTA,” he said.