New NAFTA Deal Signed but Steel and Aluminum Tariffs Continue

President Trump, Canadian Prime Minister Justin Trudeau, and outgoing Mexican President Pena Nieto signed the US-Mexico-Canada Agreement (USMCA) at the G-20 meeting in Buenos Aires, Argentina this morning.  The USMCA is intended to replace the North American Free Trade Agreement (NAFTA) that has been in force since 1994.  Today’s signing is an important step towards adoption of the USMCA, but much work remains to be done by all three governments before it is fully adopted and implemented.

Unfortunately, the USMCA did not resolve the issue of 232 tariffs on steel and aluminum imports. In November, PMA joined a coalition of 34 business groups in urging US Trade Representative Robert Lighthizer to remove the steel and aluminum tariffs on Canada and Mexico once the USMCA was signed.  In the letter, the groups stated:

"[T]he continuation of these tariffs with respect to Mexico and Canada will create impediments to Congressional passage of the USMCA implementing bill given concerns expressed by members of Congress about the use of these tariffs with respect to our two closest allies."

The Washington Examiner wrote an article on the coalition’s warning and elaborated on the next steps in finalizing the deal:

“Congress is expected to take up the USMCA deal for a vote next year. The deal could have a rocky reception. Lawmakers like Sen. Roy Blunt, R-Mo., have called on the administration to restore the exemptions for Canada and Mexico. Democrats and their allies have also warned that they will reject it if the deal doesn't include stronger enforcement provisions. Some GOP lawmakers have expressed concerns over its anti-discrimination language.

The letter also warned against replacing tariffs with quotas:

“It is our understanding that the Administration is giving consideration to the idea of removing the steel and aluminum tariffs for Mexico and Canada but replacing them with the type of absolute quota regimes that are currently in place for South Korea, Brazil and Argentina (for steel) and Argentina (for aluminum). We strongly oppose this plan. Absolute quotas administered in the way that has been used with respect to imports from these countries have placed severe supply constraints on U.S. manufacturers and created even more business uncertainly than tariffs regarding exports from these countries.”

PMA is closely monitoring the developments with the USMCA as the agreement now moves to the U.S. Congress for ratification.  PMA will continue to advocate for the removal of steel and aluminum tariffs on Canada and Mexico prior to approval of the agreement.  PMA is also a founding member of the Coalition of American Metal Manufacturers and Users (CAMMU), a group organized to advocate for the termination of the Section 232 steel and aluminum tariffs. 

For more information and resources visit PMA’s website here or the Coalition of American Metal Manufacturers and Users website.

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