Tough talk, tariff threats resurface as USMCA readies for Wednesday debut

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Tough talk, tariff threats resurface as USMCA readies for Wednesday debut
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Instead of friendly declarations of trilateral solidarity, the prospect of punitive Section 232 tariffs on Canadian steel and aluminum is back and looming large

U.S. Trade Representative Robert Lighthizer speaks during a Senate Finance Committee hearing on U.S. trade on Capitol Hill, June 17, 2020, in Washington.If the long-awaited debut of Canada’s new trade pact with the United States and Mexico heralds a new dawn in North American relations, Robert Lighthizer sure has a funny way of showing it.

In his testimony earlier this month to the Senate Finance Committee, Lighthizer promised to take “the necessary steps” to ensure the agreement’s small-business provisions are honoured. And he threatened legal action in the event of shenanigans by Canada’s dairy sector, which is giving up 3.59 per cent of the domestic market and restricting exports on key products like skim milk powder and infant formula.

“The administrations in all three countries took advantage of the USMCA rewrite to modernize the agreement and incorporate some efficiencies that are going to make trilateral trade a lot more efficient, a lot better,” Guzman said. In a letter to Lighthizer, the Aluminum Association – a consortium of 16 U.S.-based producers of finished aluminum products – broke ranks Thursday with the American smelter operators who are calling for new penalties, and urged the U.S. trade representative to reconsider.

The landscape is dramatically different than it was in 2018, when trade talks had yet to produce a deal, the U.S. economy was healthy and it would have been political suicide for Republicans on Capitol Hill to disagree openly with White House strategy, said Dan Ujczo, a trade lawyer and Canada-U.S. specialist with Dickinson Wright in Columbus, Ohio.

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