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Metal tariffs remain in place. Metal tariffs remain in place.

US maintains metal tariffs, wants quotas on Mexican steel

New trade agreement has not halted 'tariff hostilities'

The United States government is seeking to impose quotas on Mexican steel exports in exchange for removing metal tariffs, the incoming government’s chief trade negotiator said yesterday.

The Trump administration imposed tariffs on Mexican and Canadian steel and aluminum in June, citing national security grounds.

Although the three countries reached an updated trilateral trade agreement last month, the protectionist measures remain in place. After completion of the NAFTA negotiations there was optimism among government officials and in the business community that the tariffs would be removed.

But the U.S. indicated two weeks ago that it might impose quotas rather than withdraw the tariffs.

Economy Secretary Ildefonso Guajardo later indicated that an agreement on their removal was required before the new trade agreement could be signed, a stand that was echoed by Foreign Affairs Secretary Luis Videgaray.

Guajardo questioned how the trade deal could be signed if there was no indication of a willingness “to eliminate tariff hostilities.”

Jesús Seade, who participated in the tail end of the trade negotiations as president-elect López Obrador’s representative, told the news agency Reuters that the current government is leading the metal negotiations but added that he had spoken to United States Trade Representative Robert Lighthizer about the possibility of removing the tariffs.

“I have had a couple of calls with Lighthizer, and it’s along those lines, to manage volumes etc. with Mexico and Canada,” he said.

Seade declined to give further details about the discussion but said that the tariffs issue had to be resolved before the new administration takes office on December 1.

“There is a month and a half left, so it needs to be resolved now,” he said.

Mexico exported US $2.5 billion of iron and steel to its northern neighbor last year, according to the U.S. Census Bureau.

However, it imported quantities of the same metals from the United States that were worth even more.

The U.S. reached a deal with South Korea in March to end steel tariffs in which the latter country agreed to cut its exports of the metal by 30% compared to averages over the past three years.

During negotiations to reach the new North American accord, a source told Reuters that United States officials informed their Canadian counterparts that they wanted a similar agreement for steel and aluminum imports.

However, Canada rejected the demand, specifying that any cap on metal imports to its neighbor would have to be higher than current levels to allow shipments to increase.

Source: Reuters (sp) 

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