Removal of 232 Tariffs is Step in the Right Direction for Passage of USMCA

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May 20, 2019
WASHINGTON, DC -- Last Friday, President Trump announced an agreement with Canada and Mexico for the removal of U.S. Section 232 tariffs on steel (25 percent) and aluminum (10 percent) for Canada and Mexico.  In return, those two countries have removed their retaliatory tariffs imposed on some American goods.

Both Canada and Mexico had indicated that they would not sign the new trilateral deal, U.S. – Mexico – Canada Agreement (USMCA), without the removal of these tariffs which have been in place for the past year.  Following last Friday’s announcement, Canada’s Foreign Minister Chrystia Freeland said that Canada will move quickly to ratify USMCA.  Their parliament adjourns on June 21 ahead of their October national election, so time is short.  Mexico has made steps forward by passing labor laws last month which help it comply with the new standards in the USMCA.

“While rice was not subject to retaliatory tariffs in Mexico or Canada, we appreciate the Administration taking this step as it signals the passing of USMCA is one step closer,” said Betsy Ward, USA Rice’s President & CEO.

The U.S. issued separate joint statements with Mexico and Canada following this announcement stating that in addition to the removal of the tariffs, the two countries would also implement measures to prevent the importation of aluminum and steel that is unfairly subsidized and/or sold at dumped prices.  There is also the safeguard stipulation that if aluminum or steel imports surge then the duties can be re-imposed.

“In all of our recent meetings on the Hill, we’ve reiterated how important USMCA is to our industry,” said Ben Mosely, USA Rice vice president of government affairs.  “With Mexico and Canada accounting for nearly 30 percent of U.S. rice exports, we want to use all means at our disposal to legislatively protect these markets.  By reinforcing the importance of these markets with Members of Congress and staff through our advocacy work, we have demonstrated the value that USMCA will bring to U.S.-grown rice and conversely, what could be at stake if we lost access to these vital trading partners.”

Additionally, the Trump Administration will delay tariffs on cars and auto parts imports for six months as trade deal negotiations with Japan and the European Union are ramping up.  USA Rice is also strongly supportive of trade deals with both Japan and the EU given that they include improved access for U.S. rice exports.