US manufacturers sent letter to USTR urging permanent exemption of Mexico and Canada from Section 232

Monday, 19 November 2018 01:14:52 (GMT+3)   |   San Diego
       

The Coalition of American Metal Manufacturers and Users signed on to a letter with 33 other organizations urging the Trump Administration to remove the Section 232 tariffs on Canada and Mexico.  The letter sent to US Trade Representative Robert Lighthizer also strongly opposes replacing tariffs with quotas.

The letter said that the tariffs “significantly affect our relationships with our most important trading partners,” and should be removed for the following reasons:

“First, the recent conclusion of the negotiations for the US-Mexico-Canada Agreement (USMCA), provides a chance for all sectors of the US economy, including manufacturing, agriculture, services and technology, to benefit from continued regional economic integration, higher North American standards and enhanced regulatory cooperation. Tariffs on imports of steel and aluminum are entirely inconsistent with the overall goals of the USMCA.”

The letter also pointed out that the USMCA already requires that a certain amount of steel and aluminum of North American origin be used in automotive production in order for the resulting vehicles to be compliant with the rules of origin under the agreement.

Additionally, the letter stated that Section 232 tariffs on steel and aluminum (and the related absolute import quotas) have caused “significant harm to American manufacturers, consumers and workers. They have raised costs significantly for a wide array of industries – including autos, machinery and equipment, chemicals, energy production, construction, medical devices, food products and household goods. This endangers the jobs of millions of workers in those industries, who collectively represent a far greater share of the American workforce than those who benefit from the restrictions.”

Because the tariffs raise the costs of manufacturing in the US and “place our manufacturers at a competitive disadvantage with respect to finished products which are made outside of the US and imported without being affected by the tariffs,” the letter stated that consumers are starting to “feel the pinch” of higher prices across the board, as evidenced by recent increases in the CPI. Based on economic models, the letter warns that these effects will only deepen over time.

Further, the letter said that the continuation of these tariffs with respect to Mexico and Canada will “create impediments to Congressional passage of the USMCA implementing bill given concerns expressed by members of Congress about the use of these tariffs with respect to our two closest allies.”

Finally, the letter noted that Canada and Mexico have responded to these tariff actions and imposed billions in tariffs on US exports in response. These retaliatory measures target a broad range of US exports, including agricultural and chemical products, which are “hurting American exporters, putting additional American jobs at risk and further harming our global competitiveness in some of our most successful export sectors.”

The letter concluded by reiterating that “tariffs are taxes,” and “in the end, they will only hurt our long-term economic growth and competitiveness, reduce our overall output of goods and services, negate the benefits of tax reform and raise costs for American businesses and families throughout all 50 states.”

The letter also noted that the Administration is giving consideration to the idea of removing the steel and aluminum tariffs for Mexico and Canada but replacing them with quotas, such as those currently in place for South Korea, Brazil and Argentina. The signers of the letter “strongly oppose this plan,” because “absolute quotas administered in the way that has been used with respect to imports from these countries have placed severe supply constraints on US manufacturers and created even more business uncertainly than tariffs regarding exports from these countries.”

For all the reasons outlined in the letter, the signers urged the Administration to remove the Section 232 tariffs imposed on steel and aluminum exports from Canada and Mexico and “allow the US to realize the potential benefits of the USMCA.”

Signers of the letter include: Alliance of Automobile Manufacturers; American Automotive Policy Council; American Beverage Association; American Chemistry Council; American Exploration & Production Council; American Wind Energy Association; Associated Equipment Distributors; Associated General Contractors of America; Associate of Equipment Manufacturers; Association of Global Automakers; Auto Care Association; Beer Institute; Car Manufacturers Institute; Coalition of American Metal Manufacturers and Users; Flexible Packaging Association; Freedom Partners Chamber of Commerce; Grocery Manufacturers Association; Hands-On Science Partnership; Industrial Fasteners Institute; Midwest Food Products Association; Motor & Equipment Manufacturers Association; National Automobile Dealers Association; National Foreign Trade Council; National Pork Producers Council; National Retail Federation; National Tooling and Machining Association; North American Die Casting Association; Precision Machined Products Association; Precision Metalforming Association; Shelf-Stable Food Processors Association; Specialty Equipment Market Association; Truck and Engine Manufacturers Association; US Chamber of Commerce; and World Trade Center Kentucky.


Similar articles

New orders for US manufactured goods down 3.6 percent in January

05 Mar | Steel News

US manufacturing PMI declines to 47.8 percent in February

01 Mar | Steel News

New orders for US manufactured goods up 0.2 percent in December

02 Feb | Steel News

US manufacturing PMI edges up 2 percentage points in January

01 Feb | Steel News

New orders for US manufactured goods up 2.6 percent in November

05 Jan | Steel News

US manufacturing industry contracts again in December

03 Jan | Steel News

New orders for US manufactured goods down 3.6 percent in October

04 Dec | Steel News

US manufacturing PMI remains unchanged in November

01 Dec | Steel News

US manufactured goods up 2.8 percent in September

02 Nov | Steel News

US manufacturing PMI contracts again in October

01 Nov | Steel News