U.S. says time running short for NAFTA talks, floats bilateral deals
- Author: Leroy Wright Mar 07, 2018,
Mar 07, 2018, 12:12
US President Donald J. Trump (right) responds to a question from a member of the news media (centre) while holding a joint press conference with Prime Minister Stefan Lofven (left) of Sweden in the East Room of the White House in Washington, DC.
The European Union trade chiefs could apply 25 percent tariffs on around $3.5 billion worth of imports from the United States, in retaliation to any tariffs from Washington. Many trade economists say Trump's zero-sum, "mercantilist" view of trade is misguided and that he is wrong to think trade deficits are always bad. On Sunday, Trump Administration officials said they expect the new duties would go into effect this coming week and there would be no exceptions on any countries - including longtime USA allies.
USA business interests and most Republicans are already largely opposed to these tariffs.
"No, we're not backing down", Trump said in the Oval Office, seated with visiting Israeli Prime Minister Benjamin Netanyahu.
Lighthizer said it is urgent to update the 1994 deal, warning that a July presidential election in Mexico plus November mid-term elections in the United States are complicating the talks.
The European Union raised the possibility of taking countermeasures, France said the duties would be unacceptable, and China urged Trump to show restraint. "Our country has been taken advantage of by everybody - nearly everybody".
"You just can't sit back and let them try and bully us". Originally that implied a country imposing safeguards would lower tariffs on other goods to balance the economic impact.
The current round of Nafta talks, which focus on updating the 24-year old treaty, are due to finish on Monday and have achieved little. "Unilateral tariff impositions risk retaliation and destabilizing the global economy, in which case American brands, workers and consumers will ultimately suffer".
Having completed the Section 232 investigation on January 11, Secretary of Commerce Wilbur Ross released the results on February 16, forming the basis for President Trump's unilateral tariff announcement.
In a statement, Harley now says, "Import tariffs on steel and aluminum will drive up costs for all products made with these raw materials, regardless of their origin". Many Republicans have voiced concerns the move will undermine the $1.5 trillion tax cut bill they passed in December.
Equally, while market participants could reasonably conclude that in this scenario a lower U.S. dollar would suit the Trump Administration, as the impact of the tariff adoptions could themselves push up USA prices and potentially crimp the country's economic growth, a weaker greenback might anyway be justified.
Trump, however, has held out the possibility of later exempting the longstanding USA neighbors if they agree to better terms in talks aimed at revising the North American Free Trade Agreement.
Senate Minority Leader Chuck Schumer said the Trump administration's plan is "not well targeted".