Just a few days ago Donald Trump was bragging on Twitter about how the steel and aluminum tariffs he imposed during the NAFTA renegotiations last year were creating huge benefits for the United States. "Steel is BOOMING", he opined. Others were warning that retaliatory tariffs imposed by Canada and Mexico were raising the price of a wide range of consumer goods -- an extra $100 on the average washing machine, for example -- but Trump sees and hears only what he wants to see and hear.
Lo and behold, after days of rumours, the Government of Canada announced this morning that the US, Canada and Mexico had reached a deal whereby all three countries would remove their tariffs on one another's steel and aluminum, while also implementing an enhanced monitoring system to ensure that other countries (guess who) don't try to game the system in order to gain access to the US market.
That makes two smart-ish trade moves by Trump in a single week. Just days ago he decided to defer threatened tariffs in European and Japanese cars, which had been based on the same wholly spurious "national security" grounds as the metals tariffs, by six months.
Mexico had directly threatened not to ratify the new USMCA deal as long as the tariffs remained in place. Canada, which is calling the deal CUSMA, had been quietly pondering the same course of (in)action. Both countries may now move ahead with ratification, but the eventual replacement of NAFTA by the new deal is by no means certain.
US Democrats have declared the deal a non-starter, ostensibly because they do not believe the labour and environmental provisions are strong enough, but more truthfully because they don't want to give Trump a big win on the economy -- already his strong suit in the minds of many voters -- with the 2020 election on the horizon. Still, the removal of the steel tariffs is welcome news, a rare sign that the Trump people can sometimes be persuaded to act in everyone's best interests.
No comments:
Post a Comment