The buzz around trade deals has focused on securing new agreements such as Trump’s revised NAFTA deal. But as the passage of the United States-Mexico-Canada Agreement in Washington remains up in the air, there’s a quick and easy trade deal that would give the economy a much-needed boost: ending steel and aluminum tariffs on Mexico and Canada.
These tariffs, justified on the pretense of “national security,” have serious costs to the U.S. economy. As the U.S. Chamber of Commerce points out, “Every week the tariffs on Canada and Mexico remain in place, approximately $500 million of America’s imports and exports are affected.”
For U.S. companies, those costs have already seen metal prices shoot up, making it more expensive for companies that use steel and aluminum to produce their goods, turn a profit, and keep workers employed.
In addition to the consequences of higher costs for steel and aluminum, U.S. tariffs have also meant that Canada and Mexico responded with retaliatory tariffs on about $15 billion of U.S. goods. Those costs have specifically targeted U.S. agriculture, hurting farmers and ranchers, and further add to the tariffs imposed by China.
Worse, those loses don’t even yield the stated benefits of Washington’s tariffs. Canada and Mexico are key allies, both of which are also working to fend off cheap Chinese steel. If anything, we should be increasing trade with Mexico and China toward a common goal of supply security and availability that would benefit the economies of all three countries.
Moreover, Trump told our allies that once agreement on the USMCA was reached, the steel and aluminum tariffs would be lifted. That deal was signed Nov. 30, 2018, and the tariffs are still in place months later.
We have large trade deficits with Mexico and Canada. NAFTA, which is under renegotiation right now, has been a bad deal for U.S.A. Massive relocation of companies & jobs. Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed. Also, Canada must..
— Donald J. Trump (@realDonaldTrump) March 5, 2018
These tariffs on our close allies are not only hurting the U.S. economy, preventing coordinated efforts against China, and imposing stiff costs to U.S. businesses, but they also remain in place in bad faith.
If Trump is serious about helping the U.S. economy and promoting good trade deals, he should start by lifting the steel and aluminum tariffs on Mexico and Canada while Washington sorts out the USMCA.
