US coalition urges no tariffs for Canada, Mexico

An ad hoc coalition of more than 45 groups from various industries in the United States has called on the administration of President Donald Trump to end the Section 232 tariffs on steel and aluminium imports from Canada and Mexico.

Members of the groups – which sent a letter to US Commerce Department Secretary Wilbur Ross and US Trade Representative Robert Lighthizer on Wednesday January 23 – include the American Bakers Association, Edge Dairy Farmer Cooperative and National Pork Producers Council, in addition to the National Tooling and Machining Association and the North American Die Casting Association.

The groups argued that if the tariffs were removed, the US could better take advantage of the US-Mexico-Canada-Agreement (USMCA) – the proposed replacement to the North American Free Trade Agreement, which addresses the trade concerns of farmers and ranchers as well as those affecting the steel and automotive industries.

Under the USMCA, steel and aluminium from Canada and Mexico are not exempt from the Section 232 tariffs, which were implemented against those countries on June 1, 2018. After the Section 232 duties took effect, the US neighbors issued retaliatory tariffs, with US farmers and food companies reportedly among those hardest hit by the new trade measures.

Mexico’s 20% punitive tariff on US pork has inflicted severe financial harm on America’s pork producers, the coalition said. Iowa State University economist Dermot Hayes has estimated that the Mexican tariff is costing producers $12 per animal, meaning industry-wide losses of $1.5 billion annually.

“For many farmers, ranchers and manufacturers, the damage from the reciprocal trade actions in the steel dispute far outweighs any benefit that may accrue to them from the USMCA,” the groups wrote.

“The continued application of metal tariffs means ongoing economic hardship for US companies that depend on imported steel and aluminium, but that are not exempted from these tariffs. Producers of agricultural and manufactured products that are highly dependent on the Canadian and Mexican markets are also suffering serious financial losses,” the coalition said in the letter.

The groups also indicated that they want the metals dispute resolved soon so that they can turn their attention to generating congressional support for the USMCA.

The governments of the US, Mexico and Canada signed the USMCA on November 30. The deal still needs approval from all three countries’ legislatures, and would enter into force 60 days after ratification by all parties.