Trump faces mounting pressure to lift tariffs on Canada, Mexico

Industry groups are renewing their push to convince President Donald Trump to lift his tariffs on Canadian a...

Posted: Nov 21, 2018 4:54 AM
Updated: Nov 21, 2018 4:54 AM

Industry groups are renewing their push to convince President Donald Trump to lift his tariffs on Canadian and Mexican steel and aluminum before signing a replacement for the North American Free Trade Agreement at the end of next week.

A group of nearly 40 US industry groups representing manufacturers, retailers and farmers sent a fresh letter this week asking the administration to remove the duties, which were imposed earlier this year. Automakers, especially, have repeatedly said the tariffs will wipe out the benefits generated by the United States-Mexico-Canada Agreement, known as USMCA.

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"Tariffs on imports of steel and aluminum are entirely inconsistent with the overall goals of the USMCA," reads the letter, which was sent to US Trade Representative Robert Lighthizer on Monday.

Trump is due to sign the new deal with Canadian Prime Minister Justin Trudeau and Mexican President Enrique Peña Nieto next week, before Mexican president-elect Andrés Manuel López Obrador takes office on December 1.

Trump's counterparts also want the tariffs lifted. Both countries have retaliated by imposing duties on American exports, including yogurt, cheese, pork, maple syrup and bourbon. In October, a Mexican official suggested his country wouldn't sign the new agreement until Trump lifts the duties.

Trudeau has indicated that the tariffs wouldn't hold up the signing of the deal.

"We're not at the point of saying that we wouldn't sign if it wasn't lifted -- although we're trying to make that case," Trudeau told CNN's Poppy Harlow earlier this month.

He added: "We would much rather have genuine free trade with the United States, so we're going to continue to work, as soon as we can, to lift those tariffs."

Trump has made it a priority to take an aggressive stance on protecting American industries from foreign countries engaging in unfair trading practices. He pushed ahead with steel and aluminum tariffs even at the cost of losing his top economic adviser Gary Cohn, who ultimately resigned in the wake of a fierce disagreement on the issue.

The Trump administration has said the duties were imposed on steel and aluminum in the interest of national security. In the letter, the industry groups said that China's unfair trade practices, including subsidizing steel and aluminum, should be addressed but argued that tariffs on Canada and Mexico are not helping to solve that problem.

They said the tariffs "have caused significant harm to American manufacturers, consumers and workers" because they raise prices for things like auto parts and beer cans.

Former Republican Missouri Gov. Matt Blunt, who represents the big three automakers -- Fiat Chrysler, GM and Ford -- has said the duties drive up the cost of production in the United States by $400 per vehicle.

The group, which is collectively called the American Automotive Policy Council, signed the letter sent to Lighthizer urging removal of the tariffs.

The USMCA will need to be ratified by Congress after it's signed. Democrats, who will have control of the House next year, have signaled concerns about the deal.

Lawmakers are likely to wait for an economic impact report from the US International Trade Commission before voting. The commission has until 105 days after the signing, or mid-March, to deliver its report to Congress.

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