President Donald Trump announced Thursday that the U.S. is hitting Canada, Mexico and the European Union with steel and aluminum tariffs, putting the fate of the North American Free Trade Agreement into further uncertainty and exposing U.S. farmers and ranchers to retaliation.
The 25 percent tariff on steel and 10 percent tax on aluminum go into effect at midnight. Mexico has already declared it will retaliate immediately, slapping its own tariffs on U.S. “pork legs and shoulders, sausages and food preparations, apples, grapes, blueberries, various cheeses” and other goods.
The Mexican tariffs on U.S. pork will be especially severe for U.S. producers, who are also suffering after China hit them with a 25 percent tariff to retaliate for the steel and aluminum tariffs.
“Today’s decision to impose tariffs on steel and aluminum from Mexico and Canada ... significantly heightens our concern as Mexico is already threatening to retaliate against U.S. pork,” said Jim Heimerl, president of the National Pork Producers Council. “U.S. pork shipped $1.5 billion of product to Mexico, its largest export market, and $792 million to Canada, its fourth-largest market, last year.
Canada is preparing a retaliation list for tariffs that contains plenty of U.S. agricultural and food products, such as orange juice, yogurt, cucumbers, poultry products, ketchup, strawberry jam, maple syrup and whiskey.
Canadian Minister of Foreign Affairs Chrystia Freeland, who spoke to reporters Thursday in Ottawa alongside Prime Minister Justin Trudeau, said the list is preliminary and will be up for public comment for 15 days before it’s finalized and then implemented on July 1.
“The U.S. now leaves us with no choice but to proceed with a WTO dispute settlement case and with the imposition of additional duties on a number of imports from the U.S.,” Jean-Claude Juncker, president of the European Commission, said in response to the announcement that the U.S. will not be extending the tariff exemptions that had been granted earlier. “We will defend the Union's interests, in full compliance with international trade law."
Trump on Thursday night released a statement saying, "The United States has been taken advantage of for many decades on trade. Those days are over. Earlier today, this message was conveyed to Prime Minister Justin Trudeau of Canada: The United States will agree to a fair deal, or there will be no deal at all."
U.S. Commerce Secretary Wilbur Ross said the U.S. is still open to negotiation.
“We continue to be quite willing and indeed eager to have further discussions with all of these parties – Canada, Mexico and the (EU) … If any of these parties does retaliate, that does not mean that they cannot continue to negotiate.”
But he also stressed that the steel and aluminum tariffs are necessary to protect the economic security of the U.S. and lower the U.S. trade deficit.
Farm groups like the U.S. Grains Council said they are concerned about the retaliatory tariffs.
"Based on information we have heard from our customers and past experience, we have every reason to believe U.S. agriculture, including the products we represent, will be among the first hit by counter-measures from our trading partners,” said U.S. Grains Council President and CEO Tom Sleight. “These countries are among our closest neighbors and friends. We have spent years building markets in these countries based on a mutual belief that increasing trade benefits all parties. We had strong hopes this situation would be averted permanently, but it now appears we need to prepare for retaliation and its direct impact U.S. farmers.”
The impact on the recently stalled NAFTA talks is unclear. Ross stressed that the failure of Mexico and Canada to conclude the negotiations and agree to U.S. demands was the reason the U.S. did not extend the exemptions for steel and aluminum tariffs on the two North American countries.
Trudeau laid the blame for the lack of a deal to reboot NAFTA on the Trump administration, but pledged that Canada is willing to continue the negotiations. The Canadian prime minister said that he tried to arrange a meeting with Trump this week in Washington to reach a final deal on NAFTA, but was told it would not be possible unless Trudeau committed to including a five-year sunset clause into the trade pact.
Trudeau said refused he refused the precondition.
“We continue to be open to working on a renewed and modernized NAFTA,” Trudeau said. “We will continue to sit down at the negotiating table.”
Senate Finance Committee Chairman Orrin Hatch said the U.S. steel and aluminum tariffs are simply bad policy.
“My position remains unchanged: Tariffs on steel and aluminum imports are a tax hike on Americans and will have damaging consequences for consumers, manufacturers and workers,” the Utah Republican said in a statement. “In light of the mounting evidence that these tariffs will harm Americans, I will continue to push the administration to change course.”
Brian Kuehl, executive director of umbrella group Farmers for Free Trade, vowed that the Trump administration will regret the tariffs that put new targets on U.S. farmers and the crops they produce.
“American farmers overwhelmingly supported President Trump in 2016 but will not be silent in the face of trade wars that harm U.S. agriculture,” he said. “This summer, as lawmakers return home, the voices of farmers who are bearing the brunt of trade chaos and uncertainty will be heard. For many farmers, this is a matter of economic survival. We will continue to fight to ensure the Administration is listening to America’s rural communities in the weeks and months ahead.”
(Updated at 10 p.m. with Trump statement on NAFTA.)