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Pressure Mounts to Eliminate Steel and Aluminum Tariffs to Secure USMCA Approval

Friday, February 08, 2019
Sandler, Travis & Rosenberg Trade Report

The Trump administration is coming under increasing pressure to eliminate its Section 232 tariffs on imports of steel and aluminum products from Canada and Mexico in order to secure approval of the U.S.-Mexico-Canada Trade Agreement.

In a recent letter to Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer, a number of U.S. trade associations urged the removal of the Section 232 tariffs as well as the retaliatory duties that have been imposed by Mexico and Canada, stating that the damage they are causing “far outweighs any benefit that may accrue” to U.S. manufacturers, farmers, and ranchers from the USMCA. The letter called on the officials to “take all necessary steps to resolve this matter so that zero-tariff North American trade can resume, and we can turn our attention to working with you to gain prompt Congressional approval of the USMCA.”

According to Inside US Trade, House Ways and Means Committee Ranking Member Kevin Brady, R-Texas, added that Congress is “not really willing to consider this agreement until the steel and aluminum tariffs are assured of being lifted off.” However, the publication noted that in a Feb. 6 meeting with the Senate Advisory Group on Negotiations Lighthizer offered little information on if and when the administration might remove the tariffs.

The White House is seeing pressure from its trade partners as well. Canadian Foreign Affairs Minister Chrystia Freeland said during a visit to Washington this week to discuss the USMCA with U.S. lawmakers that the continued imposition of the “absurd” and “illegal” tariffs on steel and aluminum from Canada is a hurdle to implementing the agreement. Earlier in the week ministers from Ontario and Quebec urged the Canadian federal government to press the U.S. harder to remove the tariffs, which they said are harming Canadian workers and industry. There have been some calls for Canada to lift its retaliatory tariffs as an enticement for the U.S. to eliminate its tariffs, but Freeland indicated that Ottawa is unlikely to do so.

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