A coalition of 34 business groups warned the Trump administration Monday that keeping in place its steel and aluminum tariffs against Canada and Mexico could imperil passage of the U.S.-Mexico-Canada Agreement on trade.
“[T]he continuation of these tariffs with respect to Mexico and Canada will create impediments to Congressional passage of the USMCA implementing bill given concerns expressed by members of Congress about the use of these tariffs with respect to our two closest allies,” the business groups said in a letter to U.S. Trade Representative Robert Lighthizer. “The business community supports the removal of this potential impediment to Congressional approval of the USMCA.”
Signatories to the letter included the U.S. Chamber of Commerce, the American Chemistry Council, the National Retail Federation, and the Alliance of Automobile Manufacturers. The groups said they backed the USMCA deal itself, calling it “a chance for all sectors of the U.S. economy” to benefit.
The groups also warned that they were “strongly” opposed to replacing tariffs with a quota system that would limit the amount of goods allowed into the U.S.
The Trump administration initially granted Canada and Mexico exemptions to its tariffs of 25 percent for steel imports and 10 percent for aluminum ones, but removed them in June as part of an effort to pressure the countries during the USMCA talks. The countries have argued that since those talks are now complete, there is no need to maintain the tariffs, which are technically a separate matter from the trade deal. The U.S. has so far balked at restoring the exemptions, fearing that that would allow China, the tariffs’ main target, to harm the U.S. steel industry.
Congress is expected to take up the USMCA deal for a vote next year. The deal could have a rocky reception. Lawmakers like Sen. Roy Blunt, R-Mo., have called on the administration to restore the exemptions for Canada and Mexico. Democrats and their allies have also warned that they will reject it if the deal doesn’t include stronger enforcement provisions. Some GOP lawmakers have expressed concerns over its anti-discrimination language.
Business groups have been pressuring the administration to retire the exemptions as well, saying they’re doing more harm than good. “They have raised costs significantly for a wide array of industries — including autos, machinery and equipment, chemicals, energy production, construction, medical devices, food products and household goods,” the groups wrote in Monday’s letter. “This endangers the jobs of millions of workers in those industries, who collectively represent a far greater share of the American workforce than those who benefit from the restrictions.”
Though the letter was sent to the U.S. Trade Representative’s office, the steel and aluminum tariffs were officially imposed by the Commerce Department. Spokespeople for both the trade representative’s office and the Commerce Department could not be reached for comment.
