Is Trump Going To Follow Through On His Traffic Threat?

NAFTA, Politics, President D. Trump

When President Donald Trump said he would add a 25 percent tariff on steel and a 10 percent tariff on aluminum, most people have no idea why he was pulling the tariff card out of his presidential deck. Trump is famous for saying the United States is an underdog when it comes to its membership in the NAFTA free trade agreement. Trump believes Mexico, as well as Canada, are quietly taking advantage of the U.S. when it comes to joint efforts to manufacture automobiles and other products. For the last 13 months, Mr. Trump’s delegation has tirelessly tried to renegotiate to terms of NAFTA, but Mexico and Canada don’t believe the agreement is flawed enough to throw it out and start over again. Those countries want to update the agreement, but Trump wants more. And in order to get his way, he is willing to threaten tariffs, and a possible trade war to get the deal he wants.

Trump is now saying the steel and aluminum tariffs may not happen if he gets a better NAFTA deal. Mr. Trump said Canada and Mexico would not be part of the tariff plan if a “fair” deal for the U.S. comes out of the NAFTA negotiations. Trump claims U.S. farmers are getting a raw deal from the NAFTA deal, so he is putting his foot down. But in his own unique way, he is hurting the final round of NAFTA talks by throwing his presidential weight into the mix. Mexico and Canada feel like Trump is bullying them into signing an agreement that will put their industries at a disadvantage. The leaders of both countries say that is not going to happen.

The European Union is not part of the NAFTA agreement. But when Trump’s tariff threat became real, the EU came out swinging. Tariff reciprocation is in the air in Europe as well as in China, and that means only one thing. Consumers will suffer. The cost of beer, automobiles and other products that contain steel or aluminum will cost more. And if Europe and China decide to put tariffs on American products like Kentucky bourbon and John Deere merchandise American companies and consumers will suffer in several ways.

Chief Economic Advisor Gary Cohn is trying to get the president to back down and wait before he signs any tariff increase. But Trump’s Commerce Secretary Wilbur Ross and trade advisor Peter Navarro want Trump to add the tariffs. Trump is still siding with those men, according to a recent CNN article.

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