Good day,
As President Trump ramps up the trade war with China, the Administration is keen to get NAFTA’s successor, the United States-Mexico-Canada Agreement or USMCA, approved. The lifting of the U.S. tariffs on steel and aluminum from Mexico and Canada – and the removal of those countries’ countermeasures – removed the external barriers from USMCA’s passage. Congress is another question.
The White House and Democrats are in talks over the trade agreement, though Bloomberg reported that Speaker Nancy Pelosi is reluctant to move forward until there’s consensus in her party. Meanwhile, President Trump has told Democrats that he won’t sign an infrastructure bill until USMCA gets approved.
In Canada, Prime Minister Justin Trudeau has been doing a victory lap following the end of tariffs, which came as he heads into a fall election. Trudeau credited Canada’s aggressive countermeasures with pressuring the U.S.
“We strategically put a significant number of American products and produce under tariffs and that had an impact on governors, members of Congress, who continued to talk to the President and to members of the administration about lifting these tariffs,” he said while visiting an aluminum processor in Quebec, according to the CBC. Tariffs were placed on items that included bourbon and Tennessee whiskey.
Did you know?
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Quotable:
“It’s going to take 10 percent of capacity out of the market.”
Eric Fuller, CEO of U.S. Xpress (NYSE: USX), on the forthcoming national clearinghouse for alcohol and drug violations.
In other news:
Tariffs hurt U.S. firms in China
A new survey finds that increases in U.S. and Chinese tariffs are hurting American businesses. (CNBC)
California sues over lost high-speed rail funding
The state of California is suing the U.S. Department of Transportation over the cancellation of nearly $1 billion in high-speed rail funding. (Los Angeles Times)
Injured trucker awarded $20 million
A Georgia trucker was awarded $20 million for an accident that severed his leg. (Go By Truck News)
Chinese businesses stay out of U.S. crude
Chinese companies have largely stopped signing export contracts for U.S. crude oil. (Reuters)
The Philippines to return Canada’s trash
The government of the Philippines plans to send 69 containers of trash back to Canada in an escalating dispute. (CBC)
$26.5 million awarded in deadly trucker road rage incident
Trucking companies, drivers ordered to pay $26.5 million in fatal road rage crash. (Seattle Times)
Final Thoughts
While the end of metals tariffs has opened the door for USMCA’s passage, don’t assume we’re out of the woods as far as future disruptions of North American trade are concerned. The deal reached on May 17 included a broadly worded provision for any party to reinstate tariffs in response to dumping. In short, each country still has a finger on the trigger.
Hammer down everyone!