Wednesday, 18 July, 2018

Trump links NAFTA to steel, aluminum tariffs

Bill Morneau Trump links NAFTA to steel, aluminum tariffs
Kristopher Love | 08 March, 2018, 04:38

Several hundred people attended the day-long event at the Richmond Marriott hotel in downtown Richmond.

The NAFTA talks have moved slowly since they began in August, in part because of USA demands ranging from changes to automotive content origin rules and dispute resolution mechanisms to imposing a clause that could automatically kill NAFTA after five years.

But just a few hours later, representatives of the three countries appeared unfazed by Trump's tirade as they closed the latest round of negotiations to remake the 24-year-old trade agreement.

Trump also said Canada had to treat American farmers better and called on Mexico to stop drugs "from pouring into the U.S".

The Treasury secretary, who said he is fully supportive of the president's move to impose tariffs on steel and aluminum over national security concerns, said he would not get into specifics of the tariffs plan he expects Trump to announce later in the week.

Seventy five per cent of business owners, regardless of the company's size or location, believe NAFTA will impact their decision-making.

Mexico's Economy Minister Ildefonso Guajardo raised the prospect of reprisals if Washington pushed ahead with tariffs and insisted NAFTA remain "a trilateral accord" in response to a US proposal to hold talks with Canada and Mexico separately.

Mr. Trump's plan to impose a new 25 percent tariff on steel imports and a new 10 percent tariff on aluminum imports has prompted bipartisan pushback from lawmakers on Capitol Hill.

USA negotiators have proposed changes to the Country of Origin Labeling (COOL) agreement concerning the auto industry.

Salvador Behar, Mexico's deputy chief negotiator, said his negotiating team had made clear Mexico would need to react to any tariffs "independently of the (NAFTA) negotiation".

However, Trump has issued threats against NAFTA throughout, linking the ongoing renegotiation to Mexico paying for the wall, and suggesting the country would not avoid punitive tariffs on steel and aluminum unless a "fair" deal was agreed. Speaking to the press during an Oval Office meeting, Trump said that exceptions to the tariffs could be included in a new NAFTA deal. Canada has made some concessions to its trading partners in recent years, allowing the European Union to ship more cheese to the country duty-free.

"The Canadian dollar is most affected by the step up in trade war rhetoric", wrote Commerzbank currency strategists in a note to clients.

This is not the first time that Trump has signaled that supply management would become a major NAFTA issue - at least when negotiators finally take it up. "We also know that we can do them from a position of strength while continuing to be fiscally responsible", he said.

"I don't think the president is going to be easily deterred", said Sen.

Kuehl said the organization continues to stress that "trade is not a zero-sum game".

Former USDA trade adviser Paul Drazek, says the tariffs are less about China and more about a connection with NAFTA and Canada, the largest steel and aluminum exporter to the US. The move is meant to grow jobs in the USA, he said.

Even though the TN visa program does not comport with President Trump's policy of "Buy American, Hire American", reports have surfaced that Lighthizer is not addressing it in negotiations, and administration officials who urged him to have been sidelined.

"The United States has been taken advantage of by other countries. for many many decades".

"The Canadian steel industry has been very insecure for a while now and this could be that thing that just puts it over the edge and thus may ultimately decimate the industry", said Keanin Loomis, President of the Hamilton Chamber of Commerce.