U.S. Terminates Steel and Aluminum Tariffs for Mexico and Canada

In what could be the beginning of the end of the Section 232 steel and aluminum tariffs, on May 17, the Trump Administration reached a deal to terminate the tariffs on Canada and Mexico. The president’s proclamation states that the United States “agreed on a range of measures” to prevent dumping of steel from either country and to avoid import surges. The measures were included to address the Trump Administration’s concerns that China was transshipping steel into the United States via Canada and Mexico.

Importantly, the tariffs were not replaced with import quotas as some had feared. PMA’s team in Washington, D.C. was active in conveying to U.S. negotiators that quotas are even worse than tariffs for U.S. companies. This shows that our voices are being heard. The Coalition of American Metal Manufacturers and Users, of which PMA is a founding member, urged the Trump Administration to terminate the remaining Section 232 steel and aluminum tariffs on other trading partners as quickly as possible.

A key motivation for the Trump Administration to reach a deal with Canada and Mexico was the reality that there was no way that the U.S.-Mexico-Canada Agreement (USMCA – the new NAFTA), would pass Congress without the termination of the steel and aluminum tariffs. Members of Congress are hearing from PMA members and other constituents about the damage that the tariffs are causing 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 United States an island of high steel prices.

On May 27, Canada took its first official step toward ratifying the USMCA, when the Parliament agreed to a motion allowing the text of the agreement to be introduced for approval. However, most analysts believe that the USMCA continues to face an uphill climb in the U.S. Congress both because of Democratic opposition and the fact that time is running out since Congress usually does not vote on trade agreements during an election year.

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