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Canada, Mexico Won't Adopt USMCA Trade Agreement With Section 232 Tariffs in Place, Senator Says

"The Senate in Mexico is not going to take (the agreement) up until the tariffs are off, and the House of Commons in Canada is not going to take it up if it is not there soon after March 1, and it’s not going to be there unless the tariffs are off,” Grassley said, CQ Roll Call reported.

Grassley previously has called on the White House to remove the Section 232 tariffs on Canadian and Mexican steel and aluminum, arguing that U.S. farmers are unlikely to see any benefit from the agreement if the steel and aluminum tariffs remain in place.

“Before Congress considers legislation to implement USMCA, the Administration should lift tariffs on steel and aluminum imports from our top two trading partners and secure the elimination of retaliatory tariffs that stand to wipe out gains our farmers have made over the past two and a half decades,” he said in a January statement.

However, American Iron and Steel Institute president and chief executive Thomas J. Gibson recently reiterated support for steel tariffs in the face of a bill to curtail the president’s authority to impose them.

“The administration’s trade actions and tax and regulatory reform policies, in addition to the strong economic climate enabled by those policies, have allowed the American steel industry to begin to recover after more than a decade of low capacity utilization and weaker earnings due to repeated surges in imports fueled by global steel overcapacity. Capacity utilization at existing mills has increased in recent months to over 80 percent -- levels not seen in the last ten years. Some shuttered plants are being re-opened, laid-off workers are going back to work and companies are making investments in new steel production facilities,” Gibson said. 

“But this recent progress will disappear, and our steel industry will again suffer dire circumstances, if the tariffs are prematurely terminated,” he said.