The taxes on imported steel and aluminum that the Trump administration plans to impose might not apply to Canada or Mexico — if the countries agree to overhaul NAFTA.
That was the message President Donald Trump posted on Twitter Monday morning as another round of negotiations regarding the North American Free Trade Agreement continued in Mexico City.
Trump surprised many in his own party and reportedly his cabinet when he announced Thursday that he would enact a 25 percent tariff on steel and a 10 percent tax on imported aluminum. Some pundits and members of Congress suggested he would soon change his mind, but in a succession of tweets, the president showed no signs of wavering.
“We have large trade deficits with Mexico and Canada. NAFTA, which is under renegotiation right now, has been a bad deal for USA,” Trump wrote. “Massive relocation of companies and jobs. Tariffs on steel and aluminum will only come off if new and fair NAFTA agreement is signed.”
NAFTA was signed by former President Bill Clinton in 1993. It eliminated duties and import restrictions on almost all products traded between the U.S., Mexico and Canada.
Trump also tied the tariffs into agriculture and reducing the international drug trade.
“Canada must treat our farmers much better. Highly restrictive,” Trump tweeted. “Mexico must do much more on stopping drugs from pouring into the U.S. ... Millions of people addicted and dying.”
While a number of steelmakers thanked the White House for what the industry has said was long overdue, representatives from several steel-consuming sectors, including HVAC, said they were deeply disappointed.
Chris Kuehl, Ph.D., an economic analyst with the Fabricators and Manufacturers Association, said the group was shocked by the move.
“Frankly, most analysts and observers never thought it would come to this,” Kuehl said. “There were so many reasons that imposing tariffs on imported steel was a bad idea. It instantly makes everything made of steel more expensive in the U.S. — cars, buildings, equipment, etc. It instantly pits the U.S. against its major allies as we get the vast majority of our steel from countries like Canada, Japan, South Korea, Mexico and other friendly states. It also guarantees a trade war as these nations are prepared to retaliate immediately.”
The Air-Conditioning, Heating, and Refrigeration Institute, which represents most of the major U.S. manufacturers of HVAC equipment, said it was disappointed in the White House’s decision.
“As major users of steel and aluminum, we have been proactive in explaining to the administration that the HVACR and water heating industry would be negatively impacted by an increase in tariffs, as would the consumers that rely on the products we manufacture,” association President and CEO Stephen Yurek said.
Absent from those criticizing the White House’s decision was the Sheet Metal and Air-Conditioning Contractors’ National Association. In a prepared statement, legislative affairs director Stan Kolbe said the group would wait before weighing in.
“SMACNA is supportive of a competitively priced domestic steel market,” Kolbe said. “Since the Trump administration steel tariff policy is still unfolding for announcement in the near future, its impact is yet to be determined. SMACNA will continue to closely monitor the situation on behalf of our members to see what impact, if any, there will be on the domestic steel market.”