New York: US President Donald Trump said the US won’t lower tariffs on steel and aluminium from Mexico and Canada unless the two countries agree to a revamped Nafta that’s fair to the US.
“Nafta, which is under renegotiation right now, has been a bad deal for U.S.A. Massive relocation of companies & jobs,” the president said in a tweet Monday. “Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed.”
Canada must treat American farmers “much better”, and Mexico must stop drugs from “pouring into the US”, he added.
It’s the latest sign that Trump’s plan to impose stiff tariffs on steel and aluminium is overshadowing talks to overhaul the North American Free Trade Agreement. The president’s intervention may complicate a process that had already been yielding little progress on the most contentious issues.
French President Emmanuel Macron said on Monday that the European Union must take urgent action at the World Trade Organisation if the US goes ahead with tariffs on steel and aluminium,
Speaking after meeting Quebec Premier Philippe Couillard, Macron said the planned measures amounted to “economic nationalism” and nationalism was a war in which all sides lose.
“It is important in this context that the European Union reacts swiftly and proportionately within the WTO and in respect of the WTO,” Macron told journalists.
The Mexican peso and Canadian dollar extended their losses after Trump’s comments. The peso declined 0.7 per cent to 18.9628 per dollar, near the weakest level in almost two months. The Canadian dollar was down 0.8 per cent to C$1.299, the weakest since July.
Until recently, the US probe into the national-security risks of steel and aluminium has been considered separate from the Nafta discussions. Over the weekend, Trump advisers gave no indication that any countries would be excluded from the tariffs.
The seventh round of negotiations wrap up Monday in Mexico City, with US Trade Representative Robert Lighthizer due to meet with Mexican Economy Minister Ildefonso Guajardo and Canadian Foreign Minister Chrystia Freeland, just hours after Trump’s tweet. The three will address the media in the afternoon.
Trump’s decision on tariffs came on Thursday in the middle of talks, catching negotiators off guard. On Sunday, Trump’s senior trade advisers said the president doesn’t want any nation excluded from the tariffs, set to be imposed as early as this week. Canada, the biggest supplier of steel and aluminium to the US, and Mexico, the No. 4 source of steel, have asked to be excluded, and both indicated they will strike back if Trump includes them in the stiff duties.
At the Nafta talks in Mexico City, negotiators agreed on two more topic areas and discussed details of Canada’s idea to redraw the way regional content for cars is measured. Yet work on the autos issue, which may hold the key to the entire deal, has been slow. It now looks impossible for negotiators to meet their goal of getting an agreement by the end of this month, especially amid the prospect of escalating trade tensions from the steel dispute.
