Trump Lifts Some Steel, Aluminum Tariffs
President Donald J. Trump recently announced that the United States will be lifting its steel and aluminum tariffs imposed on Canada and Mexico in exchange for a new monitoring and enforcement system that will prevent import surges into the U.S. As a part of the agreement, Mexico and Canada will also be lifting its retaliatory tariffs on American products.
The lift of metal imports resolves a yearlong standoff involving the president’s new agreement. Prior to the lift, Senate Republicans were refusing the United States-Mexico-Canada Agreement trade deal that had plans to replace the North American Free Trade Agreement.
In March 2018, Trump imposed tariffs to affect steel and aluminum imports from other countries across the globe, including China, Canada, Mexico and the European Union. The assigned duties were 25% on steel products and 10% on aluminum.
Companies that felt they needed to use steel or aluminum from another country—because that particular product wasn’t made in the U.S., for example—had the opportunity to apply for an exemption.
By June, the U.S. allowed the tariffs to go into effect for Canada, Mexico and the European Union, after months of discussion of possible exemptions. The U.S. Department of Commerce also announced the first round of exemptions, while noting that it would be investigating whether some companies in the market were taking advantage of the duties and raising prices unduly.
Earlier this month, as Trump continued work on updating the USMCA, Steel Dynamics CEO Mark Millett went on the record to say he believed a quota system would replace the current tariffs that the steel and aluminum industry were subjected to.
However, some in the aluminum industry were reportedly against the quotas, in fear that they would raise prices on aluminum-dependent goods.
What’s Happening Now
According to a joint U.S.-Canada statement, the tariffs were lifted over the weekend. In addition, President Trump also called on Congress to endorse the USMCA, to “make our economy even more successful than it already is—if that's possible. Which, it is possible."
Since the tariffs had impacted so many American companies and consumers—costing Americans around $900,000 for every job saved or created according to a study by the Peterson Institute for International Economics—many are hailing the agreement.
Greg Ugalde, chairman of the National Association of Home Builders and a home builder and developer from Torrington, Connecticut, issued the following statement via email, “NAHB commends President Trump for removing tariffs on steel and aluminum imports from Canada and Mexico.
“This will provide momentum for Congress to ratify the United States-Mexico-Canada Agreement (USMCA), which holds the potential to lift the housing economy.”
Mexico’s foreign affairs undersecretary for North America, Jesús Seade, added, “This action opens the path to advance toward the ratification,” in regard to replacing the NAFTA deal.
Representing some 30,000 companies and formed to advocate against Trump’s 2018 tariffs, the Coalition of American Metal Manufacturers and Users also welcomed the news.
In a statement to NPR the coalition said: “These tariffs are damaging the U.S. manufacturing sector, and particularly downstream U.S. steel and aluminum consuming companies, by increasing prices and lead times for both domestic and imports of steel and aluminum and making the U.S. an island of high steel prices.”
Although the agreement resolves metal tariffs, the North American pact still faces potential opposition from the Democratic party. However, if the deal can finally reach approval, the new agreement could be voted in Congress before lawmakers leave for August recess.