Northwest Arkansas Democrat-Gazette
U.S. lifts Canada, Mexico tariffs
Duties on steel, aluminum seen as roadblocks to trade pact.
WASHINGTON — Bogged down in a sprawling trade dispute with U.S. rival China, President Donald Trump took steps Friday to ease tensions with America’s allies — lifting import taxes on Canadian and Mexican steel and aluminum and delaying auto tariffs that would have hurt Japan and Europe.
By removing the metals tariffs on Canada and Mexico, Trump cleared a key roadblock to a North American trade pact his team negotiated last year. As part of Friday’s arrangement, the Canadians and Mexicans agreed to scrap retaliatory tariffs they had imposed on U.S. goods.
“I’m pleased to announce that we’ve just reached an agreement with Canada and Mexico, and we’ll be selling our product into those countries without the imposition of tariffs, or major tariffs,” Trump said in a speech to the National Association of Realtors.
In a joint statement, the U.S. and Canada said they would work to prevent cheap imports of steel and aluminum from entering North America. The provision appeared to target China, which has long been accused of flooding world markets with subsidized metal, driving down world prices and hurting U.S. producers. The countries could also reimpose the tariffs if they faced a “surge” in steel or aluminum imports.
Farmers, ranchers and business groups had been pushing to lift the metals tariffs, to encourage Canada and Mexico to remove the tariffs they have placed on U.S. products in return. Canadian and Mexican levies on products like pork, cheese and milk have especially hurt American farmers who are already smarting from Trump’s trade conflicts with China and Europe.
Earlier Friday, the White House said Trump is delaying for six months any decision to slap tariffs on foreign cars, a move that would have hit Japan and Europe especially hard.
That extension delivers a
temporary reprieve to global automakers and auto suppliers, which had been bracing for tariffs of up to 25%. But it sets up a tight deadline for the president and his advisers to reach trade deals with Japan, Europe and potentially other countries.
“If agreements are not reached within 180 days, the president will determine whether and what further action needs to be taken,” White House press secretary Sarah Sanders said in a statement.
In imposing the metals tariffs and threatening the ones on autos, the president was relying on a rarely used weapon in the U.S. trade war arsenal — Section 232 of the Trade Expansion Act of 1962 — which lets the president impose tariffs on imports if the Commerce Department deems them a threat to national security.
But the steel and aluminum tariffs were also designed to coerce Canada and Mexico into agreeing to a rewrite of the North American free trade pact. In fact, the Canadians and Mexicans did go along last year with
a revamped regional trade deal that was to Trump’s liking. But the administration had refused to lift the taxes on their metals coming into the United States until Friday.
The new trade deal — the U.S.-Mexico-Canada Agreement — needs approval from legislatures in the U.S., Canada and Mexico.
Thomas Donohue, president of the U.S. Chamber of Commerce, said the lifting of the tariffs “will bring immediate relief to American farmers and manufacturers. Critically, this action delivers a welcome burst of momentum for the USMCA in Congress.”
Canadian Prime Minister Justin Trudeau credited his government for holding out to get the tariffs removed.
“We stayed strong,” he said. “That’s what workers asked for. These tariffs didn’t make sense around national security.”
Trump had faced a deadline today to decide what to do about the auto tariffs.
In a statement issued by the office of Mexico’s president, Andres Manuel Lopez Obrador, the government said there would be no steel or aluminum quotas.
Mexico said that it would lift the retaliatory tariffs that it had imposed. Both countries agreed to take measures to avoid dumping and to establish a process to monitor steel and aluminum trade between the two countries.
Taxing auto tariffs would mark an escalation in Trump’s aggressive trade policies and likely would meet resistance in Congress. The United States last year imported $192 billion worth of passenger vehicles and $159 billion in auto parts.
“I have serious questions about the legitimacy of using national security as a basis to impose tariffs on cars and car parts,” Iowa Republican Sen. Charles Grassley, chairman of the Senate Finance Committee, said in a statement Friday.
In a statement, the White House said that Commerce Secretary Wilbur Ross has determined that imported vehicles and parts are a threat to national security.
Meanwhile, Trump is locked in a high-stakes standoff with China. The U.S. accuses Beijing of stealing trade secrets and forcing American companies to hand over technology in a headlong push to challenge American technological dominance.
The two countries have slapped tariffs on hundreds of billions of dollars in each other’s products. Talks broke off last week with no resolution.
The hostilities between the world’s two biggest economies have weighed heavily the past couple of weeks on the U.S. stock market, threatening a long rally that Trump touted as a vindication of his economic policies. Opening a new front in the trade wars against EU and Japan likely would have worried investors even more. Information for this article was contributed by Paul Wiseman,Tom Krisher, Kevin Freking, Rob Gillies, Darlene Superville, Deb Riechmann, Martin Crutsinger and Geir Moulson of The Associated Press; and by Ana Swanson and Dan Bilefsky of The New York Times.