Trump: “If we can’t make deal with the EU, tariffs will be imposed on cars.”
Trump says will keep steel, aluminum tariffs on mexico, canada unless they can do something like quotas
Commerce Secretary Wilbur Ross said the new trade agreement reached between the U.S., Canada and Mexico nonetheless will not result in the removal of steel and aluminum tariffs.
“There are problems specific to steel and aluminum relating to our national defense, and at this point of time, those stay the same,” he told Fox Business Network.
There is no timeline for removing steel and aluminum tariffs. “For that matter, there’s also a provision in here that if we put in a [Section] 232 on automobiles in the future, there will be an exemption of current levels from within the Canadian, Mexican manufacturing.”
He said one benefit of the new agreement is that 40%-45% of auto content be produced at wages more than $16 per hour, “meant to assure that the U.S. gets its fair share.”
With a Nafta deal on the table — and a bullet dodged for the auto sector — the clock is ticking for the next key trade talks for Canada’s steel and aluminum industries.
After a marathon weekend of discussions, negotiators secured a deal to replace the 24-year-old Nafta agreement just before a midnight deadline on Sunday. However, the steel and aluminum tariffs that U.S. President Donald Trump imposed on Canada and Mexico will be dealt with separately, according to senior Trump administration officials who spoke on condition of anonymity. They did not offer a timeline for when those tariffs could be removed.
Canada and Mexico will push to resolve the steel and aluminum tariffs over the next two months, leading up to the signing of the new USMCA deal, three people familiar with talks said, speaking on condition of anonymity. Mexico’s economy minister has said the country hopes to resolve the steel and aluminum tariffs before the USMCA is signed.
“If I were Canada, I would use the next 60 days, leading to the final signing of the agreement to get this exemption because after that we lose all our leverage,” Jean Simard, Chief Executive Officer of the Aluminium Association of Canada, said by telephone. “We certainly are pleased to see that there was an agreement over the weekend but, at the same time, we’re very disappointed that current U.S. tariffs on aluminum imports from Canada haven’t been lifted.”
Trump’s so-called “232 tariffs” were named for Section 232 of the Trade Expansion Act of 1962 and allow the U.S. president to restrict imports for national security. Canada has responded with its own tariffs. One side letter that’s part of the deal allows for 60 days of negotiations in order to “adopt or maintain” any 232 tariff, though it was unclear when, or if, that would kick in for steel and aluminum. They remained in effect Monday.
“The effort to achieve the goal of a fair trade agreement that protects workers in the United States, Canada and Mexico is far from over,” Leo Gerard, president of United Steelworkers International said in a statement. “From the beginning, the USW has made it clear that Canada should not have been subject to Section 232 measures.”
“The impacts of any provisions in this area are key concerns not only on a bilateral basis, but for the USW, whose members work in this sector in both countries,” USW, as the group is known, said in the statement.
Eighty-four percent of aluminum produced in Canada, or 2.5 million metric tons, is exported to the U.S. each year, meaning the 10 percent tariff imposed by the Trump administration poses a significant threat to the Canadian industry. Canada exports a smaller percentage of steel but the tariff is higher at 25 percent.
Steel tariffs have discouraged Canadian importers from committing to supply contracts, resulting in shortages in some steel products and hurting the construction industry. On the other side of the border, the benchmark price of steel has climbed 31 percent, helping boost margins for U.S. steelmakers.
Prices of rebar, or reinforcing bar, have soared as much 50 percent in Canada, adding about C$10,000 ($7,808.23) to the construction cost per condominium unit, Richard Lyall, president of the Residential Construction Council of Ontario, said. Builders are being told they have to “eat the difference,” and further shortages could double the increase.
“If you’re talking about an increase of $20,000 a unit on steel prices, that could kill projects because that’s the profit,” Lyall said.
“That is an unfortunate outcome but from what I’ve seen the parties are going to continue to talk about it,” Lawrence Herman, trade lawyer at Herman & Associates in Toronto, said on BNN Bloomberg TV. “The U.S. has dug their heels in on this national security provision.”
