Trump’s New Tariffs May Blow Up NAFTA


David A. Andelman, visiting scholar at the Center on National Security at Fordham Law, wrote an op-ed for WENY News about the NAFTA renegotiations under the Trump administration.

The NAFTA talks looked promising until last week, when Donald Trump exploded over the phone at Mexican President Enrique Peña Nieto about the border wall. Both presidents stood firm on their positions; Peña Nieto said Mexico won’t pay for the wall, while Trump insisted that it would, culminating in, as one Mexican official told the Washington Post, Trump losing his temper.

Then, along came the bombshell announcement on Thursday morning from the President that he was also going ahead with a massive 25% tariff on steel imports and a 10% tariff on aluminum imports. Aimed at China, it’s actually going to hit our neighbor to the north particularly hard, for Canada is America’s largest source of steel and steel products — providing 16% of all imported steel — followed by Brazil, and South Korea. China doesn’t even make it into the top 10 of suppliers to the American market.

Despite the blowup between Trump and Peña Nieto, the nimble negotiators of a new North American Free Trade Agreement might still have been able to salvage a complete makeover of the 24-year-old pact. But Trump’s sudden and utterly unanticipated steel and aluminum tariffs now make their task much harder.

Overriding many of the more sensible voices in his administration — like Gary Cohn, his chief economic adviser — the tariffs will only further poison an already thoroughly-polluted NAFTA well, potentially touching off a trade war if the injured parties decide to retaliate.

Of course, Trump could still impose these tariffs, while choosing to exempt certain countries — like Canada and Mexico — from the new tariff schedules. Indeed, he still hasn’t signed the document, so he also has the option of choosing the smartest route and quietly scrapping the whole idea. Perhaps he might reconsider when he sees the damage his announcement did to the stock market — the Dow plunging more than 400 points in the aftermath on Thursday. After all, he’s spent a year taking credit for its outsize advance.

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