In a sudden wave of common sense, the United States has agreed to end tariffs on steel and aluminum from Mexico and Canada imposed in March 2018, clearing a major obstacle to congressional passage of President Trump’s new North American trade deal which is little different from NAFTA.
The bargain calls for Mexico and Canada to adopt tough new monitoring and enforcement measures to prevent Chinese steel from being shipped to the U.S. via their territory. U.S. tariffs are to be lifted in 48 hours. Trump, not incorrectly, blames Chinese overproduction for depressing global steel and aluminum prices, driving many U.S. mills out of business.
Canada and Mexico, neighbors and close U.S. allies, had bristled at being labeled national security dangers and rejected Trump's initial demand that the two nations accept quotas on how much aluminum and steel they could sell to the US. Especially annoying since US aluminum makers had moved their plants to Canada.
We hopefully see a quick end to Trump's proposed 25% tariff on imported autos and auto-parts. Last year Trump rejected the EU’s offer to drop its 10% auto-import tariffs to zero if the U.S. would drop their 2.5% auto-import tariff and 25% import tariff on light trucks.
Unlike his trade confrontation with China, Trump is virtually alone in favoring tariffs on all imported cars. With auto assemblies globally sourced, no automaker or auto parts supplier ever asked for this ‘protection'.
I don't believe there will be a trade deal with China, merely a divorce and a re-sourcing of supply chains to other low-cost nations where theft and quality control is not an ongoing problem and the government is not engaged in a criminal conspiracy. To keep ahead of the decline in the Chinese Yuan, the US may need to increase the current 25% tariffs to 40% or higher.
We've run out of other people's Social Security taxes needed to subsidize our low income tax rates.
