Fill me in:
There’s been a flurry of news about trade and tariffs lately. Tariffs on a raft of goods have taken effect over the last few months, and American businesses and consumers have started to bear the brunt of the new levies. Meanwhile, after just over a year of negotiations, the Trump administration recently sealed an important deal with Canada and Mexico to revamp NAFTA.
Where things stand:
The U.S. has so far imposed $250 billion worth of tariffs on goods imported from China, and Beijing has retaliated with tariffs on a total of $110 billion worth of U.S. goods. Meanwhile, the steel and aluminum tariffs that were imposed this summer remain in effect for many nations across the world, including Canada and Mexico, and so do those countries’ retaliatory tariffs on U.S. exports of pork, cheese, apples, candies, paper products, processed foods, and furniture.
Numbers to know:
$150 billion. That’s the value of retaliatory tariffs from China, Canada, Mexico, and the European Union that are currently in effect; $20 billion of that is from Canada and Mexico alone. Those tariffs are hurting American farmers, ranchers, and manufacturers right now, and the costs could hit consumers soon, too. But if the U.S. lifts the tariffs it has imposed, the retaliation would also be lifted.
Why does it matter?
Tariffs are taxes on American consumers. The Trump administration repeatedly indicated it was sticking with steel and aluminum tariffs on Canada and Mexico as a negotiating tactic to force a new deal on NAFTA. By that formulation (and setting aside the fact that such a justification runs counter to the intent of the statute the administration used to levy the tariffs), the steel and aluminum tariffs are no longer necessary now that an agreement has been reached.
“We are very disappointed that the steel and aluminum tariffs on Canada and Mexico, along with retaliatory tariffs on $20 billion of U.S. exports, still remain in place. Imposing these tariffs on our neighbors does little to address the real issue of Chinese overcapacity. Instead, they only alienate our best customers and closest allies.” — U.S. Chamber President and CEO Tom Donohue (read more)
President Trump said during an interview with CBS’s “60 Minutes” that his administration “might” slap more tariffs on China, and there’s no clear exit ramp on the steel and aluminum tariffs.
The U.S. Chamber is working overtime to make the case that tariffs are the wrong approach, and we’re urging the administration to take immediate action to lift the metals tariffs on Canada and Mexico – and to not replace them with quotas. The U.S. should hold China accountable for its unfair trade practices, but it should do so by working with allies rather than imposing disastrous new taxes on hardworking Americans.