Elimination of steel and aluminium tariffs seen as another key step toward ratification of new North American trade agreement
Friday afternoon’s announcement that the US government has rescinded its Section 232 tariffs on aluminium and steel imported from Canada and Mexico, and the corresponding removal of Mexican tariffs on US-made boats, are being interpreted as key steps toward ratification of a new free-trade deal to replace the 25-year-old North American Free Trade Agreement (NAFTA) in all three countries.
The National Marine Manufacturers’ Association (NMMA) applauded Friday’s announcement, which “clears the deck for ratification of the United States-Mexico-Canada Agreement (USMCA) and marks the end of all North American retaliatory tariffs on boats,” according to the organisation.
“The agreement between the US, Canada, and Mexico on aluminium and steel tariffs – which also removed Mexico’s retaliatory tariffs on US boats – is a significant step towards reaching a verifiable trade deal that benefits all,” said NMMA president Thom Dammrich. “We thank Mexican, Canadian and American officials for their good-faith negotiations and tireless efforts that resulted in this much-needed resolution. Moving forward, we call on all three countries to address remaining trade issues – most importantly, ratifying USMCA to bolster the long-term success of our industry and respective economies.”
US president Donald Trump originally imposed tariffs of 25% on steel and 10% on aluminium imported from Canada and Mexico in March 2018, citing national security grounds. That move was immediately met with the implementation of retaliatory tariffs on a range of US-made goods by Canada and Mexico, including boats. Canada took the first step of rescinding its 10% tariff on US boats on May 3.
Beyond representing a significant irritant to Canada and Mexico, the tariffs had brought progress on ratification of the United States-Mexico-Canada Agreement (USMCA) to a virtual standstill. Canadian, Mexican and US lawmakers have repeatedly stated that ratification of the USMCA agreement would be impossible as long as the Section 232 tariffs remained in place.
David MacNaughton, Canadian Ambassador to the United States, said on Sunday that he expects the new USMCA trade agreement to be ratified in the US by the end of July, before the summer sessions wraps up. US vice president Mike Pence is to meet with Canadian prime minister Justin Trudeau in Ottawa on May 30 to discuss advancing ratification before the Canadian legislature breaks for the summer on June 21.