Section 232 Steel and Aluminum Tariffs Lifted on Canada, Mexico
Section 232 steel and aluminum tariffs on Canada and Mexico are going away, the U.S. said May 17. They will be lifted from Canadian imports within 48 hours, but the Mexican government has not indicated timing for the relief there, and the Commerce Department did not respond to an inquiry by press time. Canada and Mexico will lift their retaliatory tariffs, which hit U.S. prepared food, agriculture and metals, at the same time the U.S. tariffs end.
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President Donald Trump also said May 17 that an agreement had been reached with Mexico, and industry, agriculture and union interests all responded to the news that these tariffs are ending in North America. The tariffs were levied on every country in the world besides Australia because the president said steel and aluminum imports damage U.S. national security.
The United Steelworkers union, which represents steel and aluminum workers, welcomed the news in a statement: "From day one, we made it clear that the real problem isn’t Canada or Mexico, but those countries that are undermining the trading system through predatory trade practices and non-market policies that have created massive overcapacity and trade imbalance," USW International President Leo Gerard said. Gerard said the monitoring provisions will ensure that U.S. national security is protected and that Canadian union workers in steel and aluminum will no longer be hurt. The Alliance for American Manufacturing, a group that generally supports protectionist measures for steel, said the domestic industry agrees that it has been stabilized enough that tariffs on Canada and Mexico aren't needed. "Domestic output and capacity utilization are up, more than 12,000 new jobs have been announced, and import penetration is down," AAM President Scott Paul said.
The heads of the aluminum industry trade groups for the U.S., Mexico and Canada put out a joint statement that thanked the U.S. government for lifting the tariffs without replacing them with quotas. "We are glad to see a commitment for improved coordination and monitoring within North America to safeguard against transshipment and the illegal evasion of duties," they said.
Canada and Mexico had both said the tariffs were not national security measures, but safeguard actions taken outside the rules of the World Trade Organization. They are dropping their cases at the WTO with this settlement, but cases continue from other countries hit by the tariffs.
Republicans in Congress had frequently said they would not be able to support ratification of the U.S.-Mexico-Canada Agreement, the term for the new NAFTA deal, without the end of these tariffs, with Chuck Grassley, R-Iowa, head of the Senate Finance Committee, the most insistent (and powerful) voice.
Grassley said of the tariff rescissions: "I made no secret that these tariffs had to be lifted for USMCA to pass Congress. The Trump administration has done its part. Now it’s Congress's turn. I look forward to working with the House of Representatives and my colleagues in the Senate to make sure USMCA passes this year....USMCA is better for American workers, farmers, manufacturers and service providers than its predecessor NAFTA."
He continued: “Lifting these tariffs clears the path to passage in all three countries. I’m optimistic that this renewed sense of momentum will carry USMCA across the finish line."
A prominent Democrat on the House Ways & Means committee agreed it makes sense to lift the tariffs on Canada and Mexico, but Rep. Bill Pascrell, D-N.J., added, "Is it enough to get a new deal over the finish line? Not for me it isn’t. Any new NAFTA won’t get my support until enforcement of strong labor standards can be assured.”
Several trade groups also said they hope this news will pave the way for USMCA passage. Tom Vilsack, CEO of the U.S. Dairy Export Council, said the lifting of Mexican retaliatory tariffs would "build vital momentum for swiftly advancing USMCA towards passage.” Mexico is the top export destination of U.S. dairy.
Pork producers also welcomed the news. National Pork Producers Council President David Herring said “Mexico’s 20% retaliatory tariff on U.S. pork has cost our producers $12 per animal, or $1.5 billion on an annualized, industry-wide basis."
The National Retail Federation urged Congress to pass the new NAFTA, and the U.S. Chamber of Commerce said the news "delivers a welcome burst of momentum for the USMCA in Congress, and we urge the administration and Congress to continue their efforts to chart a path toward its approval as soon as possible."