When the United States – Mexico – Canada Agreement (USMCA) was reached, many in agriculture thought it was the positive end of a trade dispute. President Trump had imposed the Section 232 steel and aluminum tariffs against Canada and Mexico to get the two countries to the table to renegotiate the now-defunct North American Free Trade Agreement (NAFTA). However, the negotiations have been had, the agreement has been reached, but the President hasn’t removed the tariffs. This is not sitting well with our neighbors to the north.
Canada has been working to have these tariffs removed. So far, they have been unsuccessful. The USMCA still needs the approval of legislative bodies in all three countries. Members of both major parties in the U.S., including Iowa Senator Chuck Grassley, have petitioned President Trump to end the tariffs before they will approve the deal.
On Monday, Canada’s Ambassador to the United States, David MacNaughton, said negotiations to remove these tariffs has “hit the skids.” Canada is looking at imposing retaliatory tariffs on the United States once again. MacNaughton says this is not meant to be an “escalation”, but rather a “substitution of old tariffs.”
Iowa Senator Chuck Grassley said on Tuesday that he doesn’t blame Canada for taking the path they are. The President Pro Tempore of the Senate says the failure to remove these tariffs lies solely at the feet of President Trump.
While the list is not expected to be released for a few days, it is expected it will include substantial amounts of Ag products, including apples, pork, and ethanol. Wine is also a good bet, as Canada is our biggest wine customer. Grassley says he hopes they don’t impose tariffs on Iowa produced products, as he has been a strong advocate for removing steel and aluminum tariffs imposed by President Trump.
Grassley reiterated the tariffs served their purpose of getting USMCA negotiations started. The negotiations have since been completed. President Trump is pleased with the deal. Grassley feels the requirements to remove the tariffs have been reached.
The USMCA faces an uncertain path in the U.S. Congress. The Section 232 tariffs are just one hurdle the agreement is facing, along with labor and environmental concerns voiced by House Democrats.