Stakeholders Say They're in Dark on Section 232 Tariff Resolution in NAFTA Region
An aluminum manufacturer, aluminum consumers and the head of the dairy processors' lobby told reporters and congressional staff members that they don't want quotas as a resolution to the metals tariffs on Canada and Mexico -- even if those quotas have "head room" above current production, as they said is rumored.
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The Aluminum Association, which organized a Nov. 27 panel on Capitol Hill, has opposed aluminum tariffs from the start, as most of its members are not primary smelters, the segment that profits from the tariffs. "The focus needs to be on China, not on Canada," association CEO Heidi Brock said. "We have seen very little evidence the [Section] 232 tariffs are affecting behavior in China." She said Chinese aluminum smelting capacity has grown by 8 percent this year. The tariffs have been in place about seven months.
Buddy Stemple, CEO of the Ravenswood, West Virginia, location of Constellium, a multinational aluminum producer, said the antidumping case on Chinese common alloy sheet has been helpful to his business, and that ironically, the 232 tariffs are undermining it, because an exclusion for more than 1 billion pounds of Chinese common alloy sheet was granted. He called the global tariffs "the wrong solution to a real problem."
Retaliatory tariffs are spreading the pain beyond companies that buy the metals. At another event later in the day, Maria Zieba, director of international affairs for the National Pork Producers Council, said that Mexico put 20 percent tariffs on American pork in July, and has started importing more pork from Canada and Chile instead of the U.S. Zieba, who was on a panel on the new New NAFTA co-hosted by the Atlantic Council and Politico, said that the administration has heard plenty from pork producers about how a new NAFTA without lifting steel and aluminum tariffs is useless to them. But, she said, she has no idea when those tariffs might be lifted, or whether Mexico would roll back its tariffs in response if they are replaced with quotas.
At the Aluminum Association briefing, Michael Dykes, CEO of the International Dairy Foods Association, said 25 percent tariffs in Mexico on U.S. cheese have eroded sales by 10 percent in the third quarter, even as some exporters take a 12.5 percent price cut to retain sales.
While Dykes and other trade group representatives said they've heard about the supposed quota solution for Canada and Mexico, Dykes said he has "no assurance from anyone" that the resolution will come by Friday, when the new NAFTA is to be signed by the three countries. "Talking to the Mexicans and Canadians, I also get mixed messages from them" about what the U.S. expectations will be for North American aluminum and steel trade after changes are made to the Section 232 tariffs.
A House of Representatives staffer told the panel that the administration is not listening to Congress's protests that Canada and Mexico aren't appropriate tariff targets. Stemple said members should vow not to vote for the new NAFTA unless the tariffs are lifted completely, without quotas, in the region. Jennifer Thomas, vice president of government affairs for the Alliance of Automobile Manufacturers, said Congress ought to move legislation that would constrain the president's ability to use Section 232. Legislation was introduced in the House in July (see 1807120023) that would give Congress the chance to roll back the metals tariffs, but neither that bill, nor one in the Senate, has gone anywhere. Even a softer bill that would leave steel and aluminum tariffs in place, but could prevent Section 232 tariffs on autos, has gone nowhere (see 1808010048).