The Friday decision by President Donald Trump to lift special tariffs on steel and aluminum imported from Canada and Mexico not only defused a year old trade battle with those two neighbors, but also strengthened the prospects in the U.S. Congress for a revised free trade agreement negotiated by the Trump Administration.
"The biggest hurdle to ratifying USMCA has been lifted," said Sen. Charles Grassley (R-IA), who had helped lead opposition to the tariffs, saying it would prevent the U.S., Mexico, Canada trade deal from being approved by Congress.
Not only will the U.S. drop import duties on steel and aluminum from Canada and Mexico, but those countries will drop retaliatory tariffs against a variety of American exports, which had caused collateral economic damage to a variety of U.S. businesses.
"These tariffs, and the retaliation they caused, have hurt American farmers, manufacturers, businesses and consumers across the country," said the group Tariffs Hurt the Heartland.
"These tariffs are damaging the U.S. manufacturing sector, and particularly downstream U.S. steel and aluminum consuming companies," said the Coalition of American Metals Manufacturers and Users.
Many voices in the U.S. and Canada praised Grassley for helping push the President to drop the 25 percent tariff on steel and 10 percent tariff on aluminum imports from Mexico and Canada, as Grassley and GOP Senators repeatedly made clear to President Trump that a new U.S.-Mexico-Canada free trade deal would go nowhere in Congress until that happened.
Thank u Mr President for really helping the farmers of Iowa w this important step in USMCA. w lifting metal tariffs @realdonaldtrump just proved he can deliver on negotiations China ought to take note/start dealing in good faith & take Pres Trump seriously— ChuckGrassley (@ChuckGrassley) May 17, 2019
One thing Canadian officials we’ve talked to keep saying: @ChuckGrassley was huge on the tariffs issue, in linking their removal to Trump getting his trade deal passed. Today, he gets a special thanks in Minister Freeland’s Twitter feed. https://t.co/RXQjpBS5fr— Alexander Panetta (@Alex_Panetta) May 17, 2019
"The agreement with Canada and Mexico to lift steel and aluminum tariffs and retaliation without quotas will allow the U.S. to better target China’s unfair trade practices and pave the way for the USMCA," said Rep. Jackie Walorski (R-IN).
"This is great news we’ve reached a deal on Steel and Aluminum," said Rep. Steve Watkins (R-KS). "Kansas exports to Canada and Mexico in 2017 totaled $4.4 billion."
"It is good these tariffs will be lifted," said Senate Democratic Leader Charles Schumer. "I've always said we should be focusing efforts on China — not Mexico, Canada, Europe."
But Democrats have also raised a series of other questions about the trade agreement - which still has not been submitted to the Congress for a vote, even though it was finalized last year.
Now, the Admin needs to move forward on improving the agreement—particularly by changing the provision that could limit the ability of Congress to address prescription drug price gouging.— Lloyd Doggett (@RepLloydDoggett) May 17, 2019
Lifting steel & aluminum tariffs on two of our closest trading partners, Canada and Mexico, is welcome news – and especially great to hear that there will be no quotas in place of tariffs. Now is time to move forward with ratifying USMCA.https://t.co/bRImUPx3pR— Sen. James Lankford (@SenatorLankford) May 17, 2019
In the wake of the tariffs announcement, Vice President Mike Pence announced on Friday that he would go to meet the Canadian Prime Minister on May 30.
While this move to ease tariffs will certainly help U.S. farmers and other businesses, there is still great uncertainty involving retaliation by China - in a separate trade dispute sparked by President Trump's aggressive efforts to levy tariffs on American trading partners.
“We actually had a deal and they broke it,” the President said of the Chinese on Friday, referring to last minute demands and changes that Beijing thought it could gain from Mr. Trump.
It did not work.
“I said, 'Can't do that. Sorry, you can't do that,'” the President said in a speech.