Home Indiana Agriculture News Deal Reached to End Steel and Aluminum Tariffs on Canada and Mexico

Deal Reached to End Steel and Aluminum Tariffs on Canada and Mexico

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The administration has reached an agreement with Canada and Mexico to end the Section 232 tariffs on those countries. This has been one hurdle facing passage of the United States-Mexico-Canada Trade Agreement that still needs congressional approval.

“We thank the administration for ending a trade dispute that has placed enormous financial strain on American pork producers,” said David Herring, a pork producer from Lillington, N.C., and president of the National Pork Producers Council. “Mexico’s 20% retaliatory tariff on U.S. pork has cost our producers $12 per animal, or $1.5 billion on an annualized, industry-wide basis. Removing the metal tariffs restores zero-tariff trade to U.S. pork’s largest export market and allows NPPC to focus more resources on working toward ratification of the U.S.-Mexico-Canada Agreement (USMCA), which preserves zero-tariff trade for U.S. pork in North America.”

Last year, Canada and Mexico took over 40% of the pork that was exported from the United States. NPPC has designated USMCA ratification as a “key vote” and will closely monitor support of the agreement among members of Congress. U.S. pork exports to Mexico and Canada support 16,000 U.S. jobs.

“We are also hopeful that the end of this dispute allows more focus on the quick completion of a trade deal with Japan,” Herring added. “U.S. pork is losing market in its largest value market to international competitors that have recently implemented new trade agreements with Japan.”

Below is the joint statement released by the United States and Canada on the agreement.

After extensive discussions on trade in steel and aluminum covered by the action taken pursuant to Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. §1862), the United States and Canada have reached an understanding as follows:

1.    The United States and Canada agree to eliminate, no later than two days from the issuance of this statement:

a.    All tariffs the United States imposed under Section 232 on imports of aluminum and steel products from Canada; and

b.    All tariffs Canada imposed in retaliation for the Section 232 action taken by the United States (identified in Customs Notice 18-08 Surtaxes Imposed on Certain Products Originating in the United States, issued by the Canada Border Services Agency on June 29, 2018 and revised on July 11, 2018).

2.    The United States and Canada agree to terminate all pending litigation between them in the World Trade Organization regarding the Section 232 action.

3.    The United States and Canada will implement effective measures to:

a.      Prevent the importation of aluminum and steel that is unfairly subsidized and/or sold at dumped prices; and

b.    Prevent the transshipment of aluminum and steel made outside of Canada or the United States to the other country. Canada and the United States will consult together on these measures.

4.    The United States and Canada will establish an agreed-upon process for monitoring aluminum and steel trade between them. In monitoring for surges, either country may treat products made with steel that is melted and poured in North America separately from products that are not.

5.    In the event that imports of aluminum or steel products surge meaningfully beyond historic volumes of trade over a period of time, with consideration of market share, the importing country may request consultations with the exporting country. After such consultations, the importing party may impose duties of 25 percent for steel and 10 percent for aluminum in respect to the individual product(s) where the surge took place (on the basis of the individual product categories set forth in the attached chart). If the importing party takes such action, the exporting country agrees to retaliate only in the affected sector (i.e., aluminum and aluminum-containing products or steel).