American customers stockpile Canada steel as tariffs loom
11 March 2018, 01:04 | Isaac Mcdaniel
A new round of North American Free Trade Agreement (NAFTA) talks ended this Monday, and by the time trade officials were wrapping up their week-long session in Mexico City, President TrumpDonald John TrumpAccuser says Trump should be afraid of the truth Woman behind pro-Trump Facebook page denies being influenced by RussiansShulkin says he has White House approval to root out "subversion" at VAMORE torpedoed the entire enterprise. Ottawa's NAFTA strategy remains unchanged as Ms. Freeland herself said this week. NAFTA's legal structure, which offers its members tariff-free access to each other's markets, was a major complication in applying the tariffs to Canada and Mexico, according to a prominent Washington trade lobbyist, who spoke on condition of anonymity due to the sensitivity of the matter.
Trump linked the exemptions for Canada and Mexico to progress on renegotiating NAFTA to favor the United States.
Other people with knowledge of Canada's thinking said the government is reviewing a list of products it planned to target in a trade dispute over the labelling of meat in 2015, from wine to mattresses to pork.
Between 2000 and 2016, the USA trade balance with its FTA partners (including Mexico) has improved by $30 billion while the trade deficit with other countries has ballooned. Erecting a wall to block a surplus of foreign steel is fairly straightforward. United Steelworkers President Leo Gerard had voiced opposition to tariffs on Canada, whose steel and aluminum industries are fully integrated with those of the United States and where workers are represented by the Pittsburgh-based union.
Trump said earlier that the tariff would only exempt Canada and Mexico if those talks reached a successful conclusion.
However, Trump indicated that the Australian could be the third country.
This carries the potential to anger China, which, under President Xi Jinping, has become more outspoken about defending its economic interests and will likely be seeking new markets for steel. We now make only about three-quarters of the steel we use.
Not only did Prime Minister Justin Trudeau personally call the president this week to plead for the exemption, but he and his cabinet ministers have for months lobbied American politicians to keep the borders as open as possible for trade. Marie, Ont., and Regina. It also allowed companies to immediately write off the cost of their capital investments, which is a huge benefit to capital-intensive industries such as steel and aluminum production. Thus, it would seem mathematically impossible that the tariff levels called for in the proclamations could achieve the protections of US steel and aluminum that the Commerce report set out as goals. "And then you start the downward spiral", she said.
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US Trade Representative (USTR) Robert E Lighthizer has been put in charge of negotiating with countries that seek an alternative to the steel and aluminium tariffs, he said.
Other countries have threatened reprisals, prompting fears of a global trade war.
The United States is trying to argue tariffs are necessary for national-security reasons, but making them contingent on a completely different negotiation - and threatening Canada, a close US ally that is considered part of America's defence industrial base - undercuts that argument, he said.
The prime minister is hoping the rumours are true.
"Working very quickly on a security agreement so we don't have to impose steel or aluminum tariffs on our ally, the great nation of Australia!"
Trump's zero-sum game view of trade is simply inaccurate, Fast said.
Steel prices were already on the rise in the USA market, with hot-rolled coil up almost 19 percent in February 2018, on an annual basis, buoyed by demand from the construction, automotive and energy sectors, said Joe Innace, Platts's content director, metals/Americas.