Senate Finance Committee Chairman Chuck Grassley has warned President Trump that his U.S.-Canada-Mexico Agreement on trade can’t pass Congress if he retains steel and aluminum tariffs on Canada and Mexico.
“If these tariffs aren’t lifted, USMCA is dead. There is no appetite in Congress to debate USMCA with these tariffs in place,” Grassley, an Iowa Republican, said in a Wall Street Journal op-ed published in its Monday edition.
The USMCA deal, which would replace the 1993 North American Free Trade Agreement, is awaiting approval by the legislatures of the U.S., Canada, and Mexico, but progress has been slow on all three fronts. In the U.S. Congress, House Speaker Nancy Pelosi, D-Calif., has yet to schedule a vote and has said the U.S. should re-open negotiations on the deal in order to firm up its enforcement provisions, a move that the U.S., Canada, and Mexico all oppose.
[Related: Mexico poised to pass labor reforms as part of Trump USMCA deal]
Several lawmakers are demanding that the U.S. restore exemptions from the metals tariffs for Canada and Mexico before they will vote for USMCA’s approval. The exemptions were initially granted when the tariffs were enacted last year, but removed by the Trump administration during the negotiations on USMCA as a tactic to pressure Canada and Mexico.
It was widely assumed that the tariff exemptions would be restored once the negotiations were done, but the administration has said allowing any exemptions undermines the tariffs. Critics like Grassley argue they are hurting the U.S. economy.
“These levies are a tax on Americans, and they jeopardize USMCA’s prospects of passage in the Mexican Congress, Canadian Parliament and U.S. Congress,” Grassley said in the op-ed.
[Also read: Trump USMCA would add $68B to GDP and 176,000 jobs, independent report says]
Grassley has been prodding the White House on the tariffs for months. Last month he told reporters that he and other senators met with Trump, U.S. Trade Representative Robert Lighthizer, and Peter Navarro, Trump’s top trade policy adviser, and pointed out that the tariffs were an obstacle to getting Congress to approve the deal.
“I said to the president, ‘Don’t you think the tariffs ought to come off?’ He said ‘No,'” Grassley told reporters.
