Trump ties contentious tariffs to NAFTA
U.S. president says levy on steel and aluminum could be dropped if new deal reached
WASHINGTON — President Donald Trump has lobbed a grenade of uncertainty onto the NAFTA negotiating table, suggesting Monday that tariffs on Canadian and Mexican steel are now dependent on whether the countries agree to a new trade pact.
The threat unfolded in tandem with a related development in Mexico City. At the end of the latest round of NAFTA talks, the U.S. trade czar indicated his desire to drive toward a quick deal — and not only complete an agreement within months, but then also hold public consultations before a final ratification vote by year’s end in the U.S. Congress.
That raises the prospect of a pressure-cooker of a negotiation over the coming months, with the twin ingredients of a tariff fight and trade talks potentially blended together into one sizzling political stew.
“We’re not backing down … Right now, 100 per cent (chance we proceed with tariffs),” Trump said Monday in the Oval Office. “But it could be a part of NAFTA.”
Trump also tweeted that steel and aluminum tariffs would only come off if a new NAFTA is signed, suggesting the tariffs could be a leverage play to squeeze Canada and Mexico in trade negotiations.
However, it remains unclear from Trump’s evolving message just how serious a plan that might be — whether it really is a calculated power play, an effort to calm his jittery party that these tariffs are temporary, or simply a poorly planned trial balloon destined for imminent deflation.
Just last week the president made clear he viewed the tariffs as permanent, casually announcing levies of 25 per cent on steel and 10 per cent on aluminum, then adding they were “unlimited,” for an “unlimited period” and “for a long period of time.”
Now he’s saying they could be gone in a few months, if a new NAFTA is completed. Adding to the confusion, the latest plot twist risked undermining the entire legal justification
for tariffs: that foreign metals present a national security risk to the U.S.
“We will always stand up for Canadian workers and Canadian industries,” Foreign Affairs Minister Chrystia Freeland said on the subject of tariffs.
“Should restrictions be imposed on Canadian steel and aluminum products, Canada will take appropriate responsive measures to defend our trade interests, and our
workers.”
Washington trade consultant Eric Miller said the president may have created a paper trail damaging his own case — by publicly suggesting he viewed the exercise as a negotiating ploy.
It’s impossible to predict how long this uncertainty will last, said Miller.
Trump promises a formal announcement within a week.
“It’s a mess,” said Miller, of the Rideau Potomac Strategy Group in Washington.
“This drama is going to play out for some time. The ramifications for NAFTA could be significant … (Or) we could be sitting here next week looking at a Canadian exemption. Because there are a lot of people in this town going to bat for a Canadian exemption. This thing is not done by any stretch of the imagination.”
Trump faces unusually fierce opposition from his own party.
While Republicans in Washington tend to shy away from fights with the president, this time they’re escalating the feud. The top figure in the House of Representatives, Paul Ryan, began the day by issuing a press release blaming the tariff talk for dips in the stock market.
He then issued a statement: “We are extremely worried about the consequences of a trade war and are urging the White House to not advance with this plan.”
Meanwhile, other Republican lawmakers were planning more formal letters to express their dissent.
Canada, the European Union, and Mexico have hinted at retaliatory measures if Trump proceeds, and the World Trade Organization has expressed concern about an escalating tit-for-tat scenario that rattles the foundation of the post-Second World War international economic system.
The North American governments completed a round of talks Monday. At the end of the round, U.S. trade czar Robert Lighthizer expressed a desire to conclude negotiations quickly, and possibly get a ratification vote before the Republican-controlled Congress, which gives way to a new Congress in January following midterm elections.