Today, National Taxpayers Union commended Senate Finance Committee Chairman Chuck Grassley (R-IA) on his commitment to lift damaging steel and aluminum tariffs prior to passage of the proposed U.S.-Mexico-Canada Agreement (USMCA). Grassley recently wrote in the Wall Street Journal that “There is no appetite to debate USMCA with these tariffs in place,” declaring the agreement “dead” unless they are removed.
Bryan Riley, head of NTU’s Free Trade Initiative, made this statement in support of Chairman Grassley’s call:
Trade policy is often dominated by special interests that reap billions of dollars in profit by imposing taxes on goods like steel and aluminum that cost families pennies at a time when they buy a can of soup or a six-pack of cola. NTU commends Chairman Grassley for speaking out on behalf of the forgotten Americans who are literally paying the price for the Trump administration’s steel and aluminum tariffs.
Research from NTU’s Free Trade Initiative has consistently shown that removing these tariffs would:
Benefit U.S. taxpayers. Although it’s common to see tariffs referred to as “tariffs on Canada” or “tariffs on Mexico,” tariffs are in fact taxes on Americans. Removing taxes on steel and aluminum imports would remove a barrier to growth for U.S. automakers, appliance manufacturers, beer and soft drink providers, and other industries that rely on steel and aluminum as inputs.
Boost U.S. exporters. Once the U.S. government dropped its steel and aluminum tariffs, Canada and Mexico could be expected to immediately remove retaliatory tariffs that restrict American exports.
Strengthen U.S. negotiating leverage in other trade negotiations. Trump administration officials repeatedly suggested that steel and aluminum tariffs were intended as negotiating leverage, and that the tariffs would be dropped once USMCA was completed. Following through on that commitment would boost the credibility of U.S. trade negotiators who are currently engaged in talks with China, Japan, and other countries.
Maintaining restrictions on imports from Canada and Mexico is contrary to the spirit of USMCA and to President Trump’s stated goal of zero tariffs, zero non-tariff barriers, and zero subsidies. The Trump administration should drop the tariffs, eliminating a key impediment to congressional consideration of USMCA.