It’s been a frequently asked question over the past few months, “when will President Trump remove steel and aluminum tariffs on Canada and Mexico?”
Back in 2018, the President used tariffs of 25% on steel and 10% on aluminum tariffs on Canada and Mexico to bring them to the negotiating table to replace the North American Free Trade Agreement (NAFTA). The move worked, but only after our North American neighbors levied tariffs of their own.
There is not much to be gained about reviewing what we already know. The three countries sat down and hashed out the United States – Mexico – Canada Agreement (USMCA). The leaders of all three countries signed the agreement during the G20 summit in Buenos Aires, last November. Then USMCA headed to the three legislative bodies for ratification. That should have been it, right? You would think so, but no.
There has been debate on the future of the trade agreement as Democrats took control of the House and wanted changes. One of the changes on the list was the removal of the steel and aluminum tariffs by President Trump. Members of his own party have been calling for this to happen as well, including Iowa Senator Chuck Grassley. In fact, Grassley has repeatedly said the agreement had absolutely no chance of passage with the tariffs remaining in place. Canada had even said they would levy more tariffs being the U.S. hadn’t removed theirs in good faith of the agreement being passed.
On Friday, President Trump relented to the urging of Ag groups and lawmakers and removed the metal tariffs. Hopefully, clearing the path for USMCA to move forward. Reactions have been coming in all day.
From the National Pork Producers Council:
“We thank the administration for ending a trade dispute that has placed an enormous financial strain on American pork producers,” said David Herring, a pork producer from Lillington, N.C., and president of the National Pork Producers Council. “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. Removing the metal tariffs restores zero-tariff trade to U.S. pork’s largest export market and allows NPPC to focus more resources on working toward ratification of the U.S.-Mexico-Canada Agreement (USMCA), which preserves zero-tariff trade for U.S. pork in North America.”
“We are also hopeful that the end of this dispute allows more focus on the quick completion of a trade deal with Japan,” Herring added. “U.S. pork is losing market in its largest value market to international competitors that have recently implemented new trade agreements with Japan.”
From Iowa Pork Producers:
“Iowa pork producers thank the Trump administration for ending the tariffs on steel and aluminum imports from Mexico and Canada. This is a change we have been requesting since last fall because retaliatory tariffs by Mexico had the effect of reducing U.S. pork exports to one of our top markets,” said Trent Thiele, president of the Iowa Pork Producers Association. Thiele is a pig farmer from Elma, Iowa.
“Mexico’s 20 percent retaliatory tariff on U.S. pork has cost our producers $12 per animal,” Thiele said, referring to an impact study by ag economist Dermot Hayes of Iowa State University. “Removing the metal tariffs restores zero-tariff trade to U.S. pork’s largest export market. This allows Iowa pig farmers to now focus our energies on convincing Congress to ratify the U.S.-Mexico-Canada Agreement.”
From Iowa Senator Chuck Grassley:
“The biggest hurdle to ratifying USMCA has been lifted. This is great news for farmers across the country. Iowa pork, soybean and corn farmers can breathe a sigh of relief that they will once again be able to sell their products in Canada and Mexico on a level playing field. The resilience of American farmers has paid off.
“I thank President Trump, Ambassador Lighthizer and the Canadian and Mexican governments for working to reach this agreement. 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. I hope Democrats won’t stand in the way of a win for the country. USMCA is better for American workers, farmers, manufacturers and service providers than its predecessor NAFTA. I’m eager to work with Democrats to help deliver much-needed certainty to our country.
“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. This will also allow us to work with our Canadian and Mexican allies on the real source of the problem when it comes to overcapacity of steel and aluminum: China.
“As Ambassador Lighthizer has said, passing USMCA is critical to U.S. credibility on trade. As negotiations continue with China and others, ratification of USMCA will show that the United States can be trusted to follow through on its commitments. It’s up to China to show that it can do the same.”
From Iowa Governor Kim Reynolds:
“Today represents a significant step forward for Iowa’s agriculture and manufacturing industries. Mexico and Canada are Iowa’s top two trading partners, and the removal of steel, aluminum, and retaliatory tariffs will increase exports of Iowa products. I want to thank President Trump and his administration for leading on this important issue throughout the entire negotiation process. Now that these tariffs have been lifted, it’s critical for Congress to ratify the USMCA as soon as possible.”
From U.S. Secretary of Agriculture Sonny Perdue:
“Today’s announcement is a big win for American agriculture and the economy as a whole. I thank President Trump for negotiating a great deal and for negotiating the removal of these tariffs. Canada and Mexico are two of our top three trading partners, and it is my expectation that they will immediately pull back their retaliatory tariffs against our agricultural products. Congress should move swiftly to ratify the USMCA so American farmers can begin to benefit from the agreement.”
It is hoped that getting any one of our trade disputes settled would start a domino effect on the others.