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Mexico expects lifting of steel and aluminum tariffs, possibly as new NAFTA deal is inked

Gerónimo Gutiérrez, the Mexican ambassador to the United States, said Monday he expects a lifting of U.S. steel and aluminum tariffs – or a clear process for the lifting – before Mexico, Canada and the U.S. meet at the G-20 meeting in Argentina this month.
Gerónimo Gutiérrez, the Mexican ambassador to the United States, said Monday he expects a lifting of U.S. steel and aluminum tariffs – or a clear process for the lifting – before Mexico, Canada and the U.S. meet at the G-20 meeting in Argentina this month. AP

Mexico’s top diplomat in the United States said Monday he expects the Trump administration to lift — or being the process of lifting — U.S. steel and aluminum tariffs imposed against his country when a new trade agreement is slated to be signed with Mexico and Canada later this month.

The steel and aluminum tariffs slapped on Mexico and Canada are one of the unresolved issues that could still thwart the signing of the Mexico and Canada Agreement. But the Mexican Ambassador to the United States, Gerónimo Gutiérrez, said Monday he expects the issue to be resolved by the time the three presidents meet in Argentina, at the G-20 summit, where the agreement could be signed.

“It’s the expectation that by the time of the signing either a solution or a very clear track that gives enough certainty that a solution is coming,” Gutiérrez said.

President Donald Trump, his Mexican counterpart Enrique Peña Nieton and Canadian Prime Minister Justin Trudeau are expected to meet in Buenos Aires, where they or their representatives are expected to sign the new United States Mexico Canada Agreement on the sidelines of the summit, which includes 20 major economies and will be held between Nov. 30 and Dec. 1.

It’s unclear whether the lifting of sanctions same applies to Canada, which has pushed for a more permanent lifting of any sanctions, according to Eric Miller, a trade consultant who has worked for the Canadian government and continues to advise them on the negotiations. The White House did not immediately to questions.

If U.S. tariffs were lifted on Mexico, it would almost certainly involve Mexico ending its own retaliatory tariffs on U.S. dairy products and dozens of other U.S. goods that have seen their markets threatened.

Most of Mexico’s duties have been imposed on U.S. agricultural exports, such as corn, soybeans and some cheeses.

Miller said the lifting of the retaliatory tariffs is “extremely important” for Trump, who is working to sell his agenda to cautious farm belt.

“You will see that as a way for President Trump of being able to tell the farmers, ‘My strategy is working. You had tariffs put on you by Mexico in the context of NAFTA re-negotiations. But we got those lifted and we got great concessions for it,’ “ Miller said.

The unwinding of all those tariffs is expected to take time, but Mexican officials said that, if the tariffs are not lifted by the signing, they expect the two sides will have a process in place to do so.

The National Foreign Trade Council, American dairy producers, automakers and other agriculture groups have been critical of the Trump administration for not lifting tariffs on imported steel and aluminum during talks to replace the North American Free Trade Agreement.

“All sectors of our economy are being affected by these tariffs – manufacturers are struggling to find materials to make products in the U.S., farmers and ranchers are having a hard time exporting their goods to countries that have imposed retaliatory tariffs, and consumers are beginning to see higher prices for everyday goods,” said Rufus Yerxa, President of the National Foreign Trade Council.

Last week in Washington, a top lobbyist for Detroit automakers blasted the tariffs at a public comment hearing on the U.S. Mexico Canada Agreement.

“Over the past year, automakers have witnessed a more than 30 percent increase in domestic steel prices,” said Jennifer Thomas, vice president of federal government affairs for the Alliance of Automobile Manufacturers. “These steep and unexpected increases in the price of key manufacturing inputs are driving up production costs for all U.S. automakers, threatening our industry’s competitiveness in the global market.”

The United States, Mexico and Canada agreed on the United States-Mexico-Canada Agreement just ahead of the midnight deadline imposed by the U.S. The agreement gives U.S. farmers greater access to the Canadian dairy market.

Franco Ordoñez: 202-383-6155, @francoordonez
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