President Trump will have to exempt Canada and Mexico from its steel and aluminum tariffs in order to get his U.S.-Mexico-Canada Agreement on trade through Congress, Rep. Kevin Brady, R-Texas, said Thursday.
“One of the keys to the passage of the U.S.-Mexico-Canada agreement is getting the steel and aluminum tariffs lifted without quotas being put in their place,” said Brady, the top Republican lawmaker on the Ways and Means Committee responsible for overseeing trade. “We should be exempting fairly traded products from countries that fairly trade with us. That would be the case with Mexico and Canada. I think that many lawmakers, Republicans and Democrats, see no need in continuing those tariffs.”
Brady is one of the Republicans who will be involved in “educating” other GOP members on why they should be backing Trump, a process that he said was just getting underway. The White House formally presented the trade deal to Congress late last month.
Canada and Mexico have been pushing hard for an exemption from the tariffs. They have gotten considerable support from the U.S. business community as well as bipartisan congressional backing. Both countries originally did have exemptions when the tariffs were first put in place last year, but the Trump administration lifted those in order to pressure the trade partners during the USMCA negotiations.
It was widely assumed that the exemptions would be restored once a trade deal was reached, but that didn’t happen after the USMC deal was announced in October. Administration officials have argued that creating exemptions would undermine the purpose of the tariffs.
[Related: Trade skeptic Democrats coming out against USMCA]
But the USMCA is facing a chilly reception in the House. Speaker Nancy Pelosi, D-Calif., has criticized it for lacking enforcement provisions and said that Mexico must pass labor reforms called for in the deal before Congress will take it up.
Rep. Earl Blumenauer, D-Ore., who chairs the Ways and Means subcommittee on trade, tweeted Wednesday that his “strong first impression” from talking to members was there was “a lot of work needed” on issues such as pharmaceuticals in order to get committee support and House passage.
Brady admitted there was work to be done on the GOP side too, but was optimistic. “We know that at the end of the day Republicans will carry this trade bill, as they have in the past,” he said.
The USMCA’s main provision requires that 75 percent of the parts of a car need to be made in North America for it to be duty-free, up from the 62.5 percent level set by NAFTA. It also requires that at least 40 percent of all auto content be made by workers making at least $16 an hour or equivalent. Democrats and unions have long called for such measures to protect domestic jobs.
