WASHINGTON – President Donald Trump is under growing pressure to remove tariffs on aluminum steel as the White House pushes for approval of a massive new trade deal with Mexico and Canada.
A key Republican senator, Chuck Grassley of Iowa, said this week there is no appetite in Congress to even debate the new trade agreement as long as the tariffs remain in place. Unless Trump removes them, the trade deal is dead, he wrote in a column for the Wall Street Journal.
Demands to lift the levies also are coming from abroad. The new U.S.-Mexico-Canada Agreement must be approved by all three countries, but leaders in Mexico and Canada say they don’t see a path forward while the tariffs are in effect.
“I don’t see (the pact) advancing in any of the three countries with the steel and aluminum tariffs in place,” said Daniel Ujczo, an Ohio-based attorney who specializes in international trade. “I think that’s true in Washington, Ottawa and Mexico City.”
What’s more, congressional Democrats and some labor groups are demanding other changes before the agreement can be approved. They want a mechanism in place to enforce the new labor rules Mexico is required to adopt under the new trade deal as a way to protect workers’ rights.
House Speaker Nancy Pelosi, D-Calif., said Thursday that while there are other concerns about the pact, “the overarching issue is enforcement.”
“You can have all of the good language in the world that you want, but if you don’t have enforcement, you’re just having a conversation,” she said. “You’re not having a real negotiation.”
Regarding the deal’s chances for approval, “we would like to get to yes,” Pelosi said. “I thought it would be easier than this.”
More than six months have passed since a triumphant Trump stood in the White House Rose Garden and announced that, after 13 months of negotiations, the United States had struck a new trade deal with Mexico and Canada.
The agreement provides rules governing the movement of products between the three countries and will replace the North American Free Trade Agreement, or NAFTA, a nearly quarter-century old accord that essentially eliminated tariffs on most goods traded among the three countries.
In the midst of the negotiations, however, Trump imposed a 25% tariff on steel and a 10% tariff on aluminum imports from Canada, Mexico and other allies, arguing they routinely take advantage of the United States. Trump argued the tariffs would provide him with leverage to negotiate better trade deals with other countries.
But countries impacted by the levies struck back and imposed retaliatory tariffs not only on U.S. steel and aluminum, but also on other products such as washing machines, motorboats, pork, coffee and whiskey.
Grassley and other critics argue those tariffs have hurt American consumers and have jeopardized the trade agreement’s prospects for approval.
“If the administration were to go ahead and remove the tariffs on steel and aluminum imports from Canada and Mexico, which they suggested all along during the negotiations they were willing to do, you would remove the biggest hurdle to Republicans getting behind the (trade) agreement,” said Bryan Riley, director of the National Taxpayers Union’s Free Trade Initiative.
Removal of the tariffs would provide “a real shot of momentum” to the push for approval of the new trade agreement, said John Murphy, the U.S. Chamber of Commerce’s senior vice president for international policy.
Murphy said it’s his understanding there are ongoing discussions with the Mexican and Canadian governments to do just that.
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Even if the tariffs are lifted, other potential obstacles could get in the way of approval.
Mexico’s Congress has passed a set of new labor laws dictated by the agreement. The new rules give Mexican workers the right to vote by secret ballot on whether they want to join labor unions and bargain collectively with their employers. But how those rules will be enforced remains a concern for U.S. labor unions and some Democrats in Congress.
The newly approved labor standards in Mexico probably comply with the trade agreement, “but then we need to see their ability to implement and enforce that,” said Richard Trumka, president of the AFL-CIO. “They haven’t shown that yet.”
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Fast-approaching elections in Canada and the U.S. also are possible hurdles.
Canadian Prime Minister Justin Trudeau faces a difficult re-election in October, which could complicate efforts to approve the trade pact even if the steel and aluminum tariffs are removed.
In the U.S., the trade deal needs to be approved before lawmakers go on recess in August, experts said, otherwise it will likely be delayed until after next year’s presidential elections.
“Every day that goes by makes the upcoming election a bigger factor,” Riley said. “As we get closer to it, legislators are going to be paying more attention not just to their own races, but to what presidential candidates are saying. So far, the Democratic candidates haven’t had much good to say about (the deal). As that election gets closer, the ability to get votes in Congress probably gets more difficult.”
Joe Crowley, a former Democratic congressman from New York, said there’s still time for Congress to approve the deal before August.
“I think it’s doable,” said Crowley, who served as chairman of the House Democratic Caucus and now is honorary chairman of the Pass USMCA Coalition, a group of trade associations and businesses advocating for the swift passage of the agreement.
While it becomes more difficult for Congress to work in a bipartisan manner as the election draws closer, the trade pact is a good deal for Americans and “needs to at least be judged on that basis,” Crowley said.
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