Free Trade

U.S. Will Lift Steel, Aluminum Tariffs on Imports from Canada, Mexico

Congress was unlikely to approve Trump's NAFTA rewrite while those tariffs were in place.

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On the North American front, the trade war is over.

The Trump administration reached a deal today to lift tariffs on steel and aluminum imports from Canada and Mexico. In a joint statement, the U.S. and Canadian governments say those trade barriers would be removed within two days, as would the tariffs on American agricultural products that Canada imposed in retaliation.

"It didn't make a lot of sense to continue to have steel and aluminum tariffs on products that move between our two countries," Canadian Prime Minister Justin Trudeau told reporters this afternoon.

Abandoning the tariffs on Canadian and Mexican metals should improve the prospects that Congress will pass one of President Donald Trump's major trade priorities: the United States-Mexico-Canada Agreement (USMCA).

Republicans, in particular, had been hesitant to support this NAFTA rewrite unless the administration first lifted those barriers. Senate Finance Committee Chairman Chuck Grassley (R–Iowa) put it bluntly in an op-ed that ran in The Wall Street Journal last month: "There is no appetite in Congress to debate USMCA with these tariffs in place."

The deal struck today should bring some relief to the hundreds of American businesses harmed by the tariffs. Prices for steel and aluminum—even steel and aluminum produced in the United States—spiked after Trump's tariffs went into effect, forcing downstream businesses and consumers to absorb those higher costs. From automakers (such as Ford) and manufacturers of heavy machinery (such as Caterpillar) to small companies that make beer kegs, nails, and industrial parts, the pain was widespread.

The deal was lauded on both sides of the U.S.–Canada border. Thomas J. Donohue, president and CEO of the U.S. Chamber of Commerce, issued a statement saying it "delivers a welcome burst of momentum for the USMCA in Congress." Jean Simard, president and CEO of the Canadian Aluminum Association, says the deal will put "an end to the harmful uncertainty that is impeding the development of the Canadian and North American aluminum industry." He specifically thanked Grassley for helping make the agreement happen.

Meanwhile, tariffs on steel and aluminum from China and other countries remain in place. The deal between the three North American countries contains a provision that will block Chinese metal from being shipping into the United States via Canada or Mexico. And the Trump administration recently escalated that part of the trade wars by increasing tariffs on about $200 billion of Chinese imports and threatening more tariffs in the coming weeks.

Today's action, then, is probably best understood as sign that Trump's trade wars are shifting rather than winding down. Faced with a greater degree of opposition over tariffs imposed on America's two closest neighbors and key trading partners, the administration retreated. But with China, members of Congress have been more willing to give the administration a free hand, even when they have criticized specific tactics.

And so, nearly a year after it began amid threats of blowing up NAFTA, Trump has ended his trade war against America's neighbors in order to improve the prospects of keeping their trade union intact. Whatever happens with China, repealing the tariffs on Canadian and Mexican steel and aluminum is a win both for free trade and for common sense.

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  1. Hahaha. Poor Boehm.

    Trump’s strategy worked.

    He stood up to Mexico and Canada and their refusal to renegotiate trade to get lower trade restrictions.

    Unfortunately, NAFTA was never free trade and is loaded with trade restrictions.
    NAFTA

    1. Someday Boehm will publicly admit that he was wrong and Canada and Mexico caved to America’s desire to lower trade restrictions.

      1. Mexico caved to our desire to export our minimum wage requirements to their auto workers. USMCA is much more restrictionist than NAFTA for automotive companies.

        1. Your thorough analysis of the USCMA and NAFTA differences never leaves us wanting.

      2. “…America’s desire to lower trade restrictions.”

        My ass! Change that to China instead and we have this…

        Hey loveconstitution1789,

        In preparation for my next comment below… Reason.com will allow me to only place ONE link per comment… Please note that my source is middle-of-the-road, not left-liberal… “The Hill” conservative or liberal? https://www.conservapedia.com/The_Hill says it is pretty much middle-of-the-road, NOT liberal as is most media…

        1. https://thehill.com/opinion/international/443511-why-xi-jinping-reneged-on-the-trade-deal-with-trump Why Xi Jinping reneged on the trade deal with Trump … From there, “Both Liu He and the official voice of the Chinese Communist Party (CCP), People’s Daily, cited three issues to explain Xi’s rejection of the deal: first, the U.S. wanted to keep some tariffs in place, and refused to abolish all of them…”

          So the Donald is FIBBING when he claims he wants zero tariffs, and all! Also as Leo keeps on pointing out here, The Donald’s record on (now formerly) having wanting to keep steel and aluminum tariffs in place, NAFTA-wise, contra the spirit of the agreement awaiting Congressional approval… This and his profligate trade wars against all and sundry, not just China… All this clearly shows that The Donald is flat-out, a protectionist. He SAYS he wants free trade, but doesn’t really.

          You are wrong to be constantly repeating The Donald’s lies about His ultimate goals be all free-trade, when His actual track record shows him to be a protectionist.

      3. “…he was wrong and Canada and Mexico caved to America’s desire to lower trade restrictions.”

        Then WHY IN THE BLOODY FUCK did Der TrumpfenFuhrer wait ALL OF THIS TIME to FINALLY remove metal tariffs against Mexico and Canada? WHY did it take Der TrumpfenFuhrer SOOO LONG to live up to the spirit of the agreement? I mean, BESIDES Congress FINALLY growing a FEW tiny hints of some BALLS, and putting the screw to Der TrumpfenFuhrer and his PROTECTIONIST instincts??!?

    2. I’m not sure what we actually won, but I’ll give credit that I’m glad that we can actually being the silly tariffs to an end. Thanks Trump for ending the tariffs.

      USMCA by all accounts I’ve seen adds more regulation to our managed trade with Mexico and Canada especially in the automotive sector. I’d much rather go the other direction with our trade deals, but as long as there are restrictionists to the left and to the right, I’m not going to hold my breath.

      1. If we want to have an American strategy for trade of spontaneous free trade, we’ll call you.

        Otherwise, America might have to play hard ball to get the Socialists of the EU, Canada, Mexico, and China to lower their trade restrictions.

  2. nice article, hope you visit my blog someday 🙂

  3. Today’s action, then, is probably best understood as sign that Trump’s trade wars are shifting rather than winding down.

    It’s a negotiation, Bob.

  4. Still not tired of all the winning.

    1. +100000

  5. Some Trump strategy…

    I would bet that the difference between “Art of the Deal” Trump’s new agreement and the old NAFTA in terms of the total tariffs of all goods and services across all the borders is less than 2%.

    Some HTS codes (Google that you Trump fan boys) get eased up, others get tightened. A whole of disruption for very little gain. But the all the Trump ball washers here think he some of sort genius dealmaker.

    A whole lot of squeezing for not a lot of juice.

  6. A whole of disruption for very little gain.

    That’s our Trump in a nutshell.

    1. MAGA

  7. Excellent News. Nice now I just need to get my prices reduced but hey its Friday and I am glad to hear this.

  8. In a joint statement, the U.S. and Canadian governments say those trade barriers would be removed within two days, as would the tariffs on American agricultural products that Canada imposed in retaliation.

    If you read the actual statement you’ll see that this is an accurate statement. Trump started punching Canada in the face and told them he’d keep punching them until they cried “uncle”, Canada started punching back instead of crying “uncle”. Now Trump, the greatest deal-maker in the history of the universe, has reached an agreement whereby he will stop punching them in the face in return for them agreeing to stop punching back. What a deal!!!

    And these retarded fucks up above actually believe Trump made a great deal. We’re right back where we were before Trump decided he was bored and needed to shake his dick at the neighbors – nothing has fucking changed except that Trump has pissed off a bunch of people, disrupted businesses and cost them a bunch of money, and then backed down from his chicken-shit bluster about what a Billy Badass he is when Justine Fucking Trudeau called his bluff. What a cuck!

    1. We get it. You hate America and for America to ever try to renegotiate its managed trade policy.

      MAGA wins out.

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