The approach to a future bill that would give Congress the ability to intervene on Section 232 tariffs will depend on what version can get the broadest bipartisan support, Senate Finance Committee Chairman Chuck Grassley, R-Iowa, told reporters Feb. 13. He said he doesn't have his mind made up on what has to be in the bill to constrain Section 232 actions. He said his staff is "moving very quickly" to put together a bill that "shows the appropriate respect to [Sen. Pat] Toomey and to [Sen. Rob] Portman," Republican committee members who have each authored bills that would constrain the president on the tariffs (see 1901310029 and 1902120033)
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Senate Finance Committee Chairman Chuck Grassley, R-Iowa, said that neither Mexican nor Canadian politicians will ratify the new NAFTA as long as those two countries are subject to U.S. Section 232 steel and aluminum tariffs. Grassley, who was speaking to reporters on a conference call Feb. 12, has said in the past that Canadian and Mexican retaliatory tariffs reacting to those tariffs have to be lifted in order to get the new NAFTA through Congress (see 1901090041).
Rep. Rick Larsen, D-Wash., said he is skeptical that a formal agreement on trade will be reached in the U.S.-China talks, citing what he called the Trump administration’s lack of “patience,” and that while some features of the renegotiated NAFTA remain in contention, he senses that more in Congress are comfortable with the language.
In his State of the Union address, President Donald Trump briefly talked about the China deal his administration is negotiating -- he said he's looking for "real, structural change to end unfair trade practices, reduce our chronic trade deficit, and protect American jobs." But he spent more time talking up the U.S.-Mexico-Canada Agreement, his replacement for NAFTA, which he called a catastrophe. "I have met the men and women of Michigan, Ohio, Pennsylvania, Indiana, New Hampshire, and many other states whose dreams were shattered by the signing of NAFTA," he said. By contrast, he said USMCA will deliver for workers. "I hope you can pass the USMCA into law so that we can bring back our manufacturing jobs in even greater numbers, expand American agriculture, protect intellectual property, and ensure that more cars are proudly stamped with our four beautiful words: 'Made in the USA,'" he said, to applause. He said he's making it a priority to reverse "decades of calamitous trade policies."
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In order for importers to be able to create certificates of origin under the U.S.-Mexico-Canada Agreement, U.S. law will have to change. That's one of dozens of changes to statutes that will need to happen to accommodate the changes between NAFTA and USMCA. The U.S. trade representative shared the six-page outline of the needed changes with Congress late on Jan. 29, fulfilling one of the steps under fast-track consideration of the trade pact. The document suggests that USTR is still seeking a lowering of U.S. de minimis levels specifically for Canada and Mexico (see 1810190043), since those countries did not raise their de minimis levels as much as the U.S. negotiators wished.
The perspectives from Congress, Canada and Mexico -- and a former acting U.S. trade representative -- diverge wildly on how much can be changed in the new NAFTA to garner votes for approval and how difficult it will be to get it passed in 2019. Miriam Sapiro, who was acting USTR and is now with SVC Public Affairs, used the term “lovely miracle” to describe how she’d feel if it passed this year. Rep. Kevin Brady, R-Texas, the ranking member on the House Ways and Means Committee, said it's clear that the metals tariffs on Canada and Mexico -- without quotas -- have to have a date certain to come off before Congress members are really about to start “to count the noses.”
Leaders of auto, aluminum and farm interest groups are all pushing for the Section 232 steel and aluminum tariffs to be lifted on Canada and Mexico, as the administration said would happen once NAFTA was renegotiated. But none of the groups will make their support for the U.S.-Mexico-Canada Agreement contingent on the tariffs being lifted.
Nearly 50 business groups -- mostly not representing metals importers -- sent a letter to U.S. Trade Representative Robert Lighthizer and Commerce Secretary Wilbur Ross suggesting that the tariffs on aluminum and steel in the NAFTA region must be lifted in order for the groups to lobby Congress to approve the new NAFTA, known as the U.S.-Mexico-Canada Agreement. "For many farmers, ranchers and manufacturers, the damage from the reciprocal trade actions in the steel dispute far outweighs any benefit that may accrue to them from the USMCA," the Jan. 23 letter said. The groups -- including the U.S. Chamber of Commerce, the United States Council for International Business, the National Foreign Trade Council and more than a dozen agriculture advocacy organizations -- said the tariffs are hurting steel- and aluminum-consuming companies. They said they want the matter resolved so "we can turn our attention to working with you to gain prompt Congressional approval of the USMCA."