Trade Cases

U.S. and Mexico Announce Bilateral Trade Deal
Written by Sandy Williams
August 28, 2018
The U.S and Mexico announced on Monday a bilateral trade deal that could replace NAFTA if Canada does not agree to terms by the end of the week.
President Trump said that he was ready to terminate NAFTA and replace it with the United States-Mexico Trade Agreement, calling the new name “elegant.”
Mexico President Enrique Peña Nieto stressed the agreement must include Canada. “It is our wish, Mr. President, that now Canada will be able to be incorporated into all of this, and I assume that they will carry out negotiations on sensitive bilateral issues between Canada and the United States,” said Nieto during a televised phone call with Trump.
Later on Monday, Mexican Foreign Affairs Secretary Luis Videgaray said that if the U.S. Trade Representative submits the bilateral agreement to Congress, it would not “preclude the possibility of Canada’s joining the agreement later.”
Trump invited Canada to re-enter trade negotiations, but warned that auto tariffs could result if a fair deal is not agreed on quickly.
“One way or another, we’ll have a deal with Canada,” Trump said. “It’ll either be a tariff on cars or it’ll be a negotiated deal. Frankly, a tariff on cars is a much easier way to go. Perhaps the other would be much better for Canada.”
The bilateral agreement contains changes to a number of controversial issues, including increasing the percentage of North American content for automobiles from 62.5 percent to 75 percent, requiring 40 percent of a Mexican built vehicle to be performed by workers earning at least $16 per hour, increasing di minimis for investment, and dropping the Chapter 19 dispute resolution measure.
Three fact sheets regarding the new bilateral agreement are listed on the website of the U.S. Trade Representative.

Sandy Williams
Read more from Sandy WilliamsLatest in Trade Cases

Canada, mirroring the US, plans to take harder line on imported steel and aluminum
The actions, which includes tariffs, are necessary to protect the Canadian market from global overcapacity. They are also needed because other countries have redirected material to Canada as a result of higher US tariffs, Carney said.

Industry cautiously optimistic despite lack of steel specifics in US-UK trade deal
Details of a new tariff-rate quota on US imports of British steel are lacking in the new US-UK trade deal.

Mexico shuts down steel importer amid trade talks
The Mexican government shut down two plants and warehouses operated by US-based LAU Industries.

US and Canada talk trade, market contemplates fate of S232 steel protections
Trade talks are progressing between the US and the market is contemplating the future of Section 232 tariffs.

Leibowitz: Tariffs are the trade version of going nuclear
In short, when tariffs go up, jobs in consuming industries go down. There is conclusive evidence from past actions: safeguard tariffs in 2002 and Section 232 tariffs in 2018. It is happening again in 2025. The Trump administration wants foreign producers (and US retailers) to absorb tariff increases (except in antidumping cases, where foreign absorption of tariffs is illegal).