Canada and Mexico won’t consider ratifying the revised North American Free Trade Agreement unless the United States lifts its tariffs on steel and aluminum imports, U.S. Senator Chuck Grassley said Tuesday.
Grassley, who held meetings with Foreign Affairs Minister Chrystia Freeland and Mexico’s Ambassador to the U.S. Martha Bárcena Coquilast week, said the levies are now the “biggest impediment” to approving the deal.
“The Senate in Mexico is not going to take it up until the tariffs are off,” Grassley said during a call with reporters. “The House of Commons in Canada’s not going to take it up if it’s not there soon after March 1 and it’s not going to be there unless the tariffs are off. And even Republicans and Democrats in the Congress of the United States say those tariffs have to go off.”
Grassley, chair of the finance committee responsible for guiding the deal to approval in the U.S. Senate, said Canada’s upcoming federal election is adding to the urgency of lifting the tariffs in order to push the trade agreement through.
“Canada isn’t going to be considering anything like this during their election season starting in June which ends in their October election,” he said. “So it’s very, very important that the White House get on board of doing away with these tariffs so we can get this thing not only before the Congress of the United States but before the Mexican Senate and the House of Commons in Canada.”
Though March 1 is the earliest that implementing legislation for the deal can be put before Congress, the U.S. government shutdown delayed publication of several key reports related to the deal. Those delays are widely expected to create a lag in the process.
U.S. President Donald Trump imposed blanket tariffs of 25 per cent on steel and 10 per cent on aluminum imports last March, citing national security concerns. Though Canada and Mexico were initially exempted from the levies, Trump allowed those reprieves to expire on June 1 pending the outcome of the NAFTA talks.
Both Canada and Mexico hit back with retaliatory tariffs on American steel, aluminum, agricultural products and a range of other goods.
Though leaders from all three countries signed the revised agreement on Nov. 30, the White House has yet to lift the tariffs. Since then, Canada has been lobbying to get the tariffs scrapped, though it has not said whether ratification of the deal depended on their removal.
Canada went to the negotiating table, so you can understand why Canada and Mexico want the tariffs off before they will enter it before the Senate in Mexico and before Canada will take it up
Republican Senator Chuck Grassley
“They believe, and I can understand their belief on this, that these steel and aluminum tariffs were put on to force Canada to the negotiating table,” Grassley said. “Canada went to the negotiating table, so you can understand why Canada and Mexico want the tariffs off before they will enter it before the Senate in Mexico and before Canada will take it up.”
“Canada has been clear from the outset that the 232 tariffs imposed on Canada are illegal and unjustified,” John Babcock, a spokesperson for Global Affairs Canada said in an email. “Now that we have concluded our NAFTA negotiation with the United States, we believe it is all the more reason for the U.S. Administration to lift its tariffs.”
The new NAFTA agreement is facing an uphill climb in Congress with both Republicans and Democrats seeking changes on a range of provisions including environmental and labour enforcement and pharmaceutical patent rules. Business groups and politicians from both parties have also pressed for the tariffs to be removed before the deal is passed.
“I didn’t really have a big problem using tariffs as a negotiating tactic to bring people to the table,” Senator Ron Johnson a Republican from Wisconsin said in a TV interview with WISN on Sunday. “But the president said, Wilbur Ross said, once we have the new NAFTA, the USMCA, signed, the tariffs will go away and they haven’t gone away.
“So, I am concerned about that. People need to understand tariffs are a tax on American consumers. They’re not paid for by China or Mexico or Canada.”
While some concerns about the revised NAFTA – called the United States Canada-Mexico Agreement by Trump — could be handled in side letters, neither Canada nor Mexico want to renegotiate the deal itself, Grassley said.
“I can tell you visiting with the Ambassador from Mexico last week and the Foreign Minister from Canada last week, there isn’t going to be any reopening of renegotiations,” he said. “Mexico’s had their bellyful of these negotiations. They want to get something done.”