Trump says Canada and Mexico will only escape new tariffs after NAFTA concessions

Washington Post

President Donald Trump on Monday further expanded his personal trade war, telling Canada and Mexico that he would only consider lifting possible tariffs on steel and aluminum if they concede to White House demands for renegotiating the North American Free Trade Agreement.

Like almost every broadside over trade war so far, his latest message was sent in a Twitter post with little explanation. He also demanded that Mexico do more to prevent drugs from entering the United States as one of the conditions for lifting upcoming steel and aluminum tariffs announced last week.

The measures hit Canada particularly hard. It is the top exporter to U.S. markets of both steel and aluminum. Canada is also the biggest importer of U.S. steel and aluminum.

The three NAFTA partners - Canada, Mexico and the United States - have been locked in talks aimed at possibly revamping the trade deal, but no clear framework has so far emerged. The latest round of negotiations is expected to wrap up Monday in Mexico City.

Trump tweeted "We have large trade deficits with Mexico and Canada. NAFTA, which is under renegotiation right now, has been a bad deal for U.S.A. Massive relocation of companies & jobs. Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed. Also, Canada must..

". . .treat our farmers much better. Highly restrictive. Mexico must do much more on stopping drugs from pouring into the U.S. They have not done what needs to be done. Millions of people addicted and dying."

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Trump on Thursday surprised much of Washington - and his own staff - by announcing that he would impose a 25 percent tariff on steel and a 10 percent tariff on aluminum. A formal announcement is expected this week or next. Commerce Secretary Wilbur Ross and top trade adviser Peter Navarro are both supportive of the tariffs, but even they were hard pressed to explain how the new restrictions would work.

Trump had originally said he wanted tariffs on steel and aluminum as a way to address what many view is a global oversupply of Chinese production, which has pushed down prices and harmed the U.S. steel and aluminum industries. But China does not export much steel and aluminum to the United States, making it hard to directly limit their production unilaterally.

In his Twitter posts on Monday, Trump for the first time made explicitly clear that Canada and Mexico would not be exempted from these tariffs.

Canada and European Union officials have both said they would likely retaliate with tariffs on U.S. goods if the White House imposed tariffs on steel and aluminum. Trump, in response, claimed he could win a trade war easily.

Trump's trade skirmishes now have multiple fronts.

Monday's attacks on Canada and Mexico come two days after Trump singled out Germany, threatening to impose a tax on all European auto imports brought into the United States.

Trump tweeted "If the E.U. wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.S. They make it impossible for our cars (and more) to sell there. Big trade imbalance!"

 

Trump believes that because the United States buys more from other countries than it exports, there is a huge trade imbalance that disadvantages U.S. workers and companies. He has vowed to use whatever tools necessary to change this, but many economists and others warn that tariffs and protectionist policies could hurt the overall U.S. economy.

In the latest NAFTA talks, Mexican and Canadian envoys are expected to press the U.S. delegation for details on Trump's tariff plan and options to be excluded.

Kevin Brady, R-Texas, chairman of the House Ways and Means Committee, said the tariff issue would be "front and center" in the NAFTA haggling.

The Washington Post's Brian Murphy contributed to this report.

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