Canada, Mexico Lift Retaliatory Tariffs as USMCA Moves Forward

Canada, Mexico Lift Retaliatory Tariffs as USMCA Moves Forward

The path to ratification of the U.S. Mexico Canada Agreement took a step forward on Monday when Canada and Mexico removed retaliatory tariffs on many products including pork, apples, grapes, cheeses, flat steel and numerous food products. This action follows President Trump’s lift of steel and aluminum tariffs.

According to their official notice of tariff removal, the Canadian government “stood up for our country’s steel and aluminum workers, industries, and communities” by imposing reciprocal, dollar-for-dollar countermeasures against imports of steel, aluminum, and other products from the U.S. Now that the steel and aluminum tariffs are lifted, Canada is lifting their countermeasures.

“With these developments, Canadian and American businesses can now get back to what they do best: working together constructively and supporting good, well-paying middle class jobs on both sides of the border,” said Bill Morneau, Canada’s Minister of Finance. “The removal of tariffs and countermeasures is a true win-win for everyone involved, and great news for Canadian and American workers, for our communities, and our economies.”

The Mexican government also lifted counter tariffs on Monday, providing a collective sigh of relief for dairy, beef and pork producers.

“Dairy farmers have much to celebrate, with the resumption of normal business with our largest export partner,” said Jim Mulhern, president and CEO of NMPF in a statement.

Mexico is the largest destination for U.S. dairy products, purchasing $1.4 billion last year. Retaliatory tariffs specifically hurt cheese exports to Mexico. Canada, the second-largest destination, also lifted its retaliatory tariffs against U.S. yogurt.

“Restoring duty-free access to the Mexican and Canadian markets is a tremendous breakthrough for the U.S. red meat industry,” Dan Halstrom president and CEO of the U.S. Meat Export Federation said in a statement. “USMEF thanks President Trump and Ambassador Robert Lighthizer for reaching an agreement with Mexico and Canada on steel and aluminum tariffs and in turn Mexico and Canada’s lifting of the retaliatory duties on U.S. red meat.”

What’s Next?

The removal of tariffs was a significant step necessary for the eventual ratification of the agreement. Still, Congress must approve the deal which could prove challenging given the concerns of many Democratic lawmakers.

“House Democrats have spent the past several months laying out their USMCA concerns with increasing specificity, and the so-called big four issues — labor standards, environmental provisions, access to medicines and enforcement — are now well-known,” Politico reports. “From Democrats’ point of view, that means the ball is in the Trump administration’s court.”

According to The Hill, Top Democratic lawmakers, including Speaker Nancy Pelosi (Calif.), say the USMCA must include tighter labor and environmental standards to win support from the party.

Trade experts say Ambassador Lighthizer will be a key player in getting concerns with the deal worked out. He will be on Capitol Hill meeting with Senate Republicans Tuesday.

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