He had faced massive pressure from the business community, the Republican party, and within his own administration to exempt Canada & Mexico.
In a common sense move, US President Donald Trump exempted Canada and Mexico from the tariffs he plans to impose on steel and aluminum.
Trump announced the tariffs today, and they will take effect in 15 days.
Both Canada and Mexico are exempted “indefinitely.”
The move had been hinted at for a few days, as Trump moved off his initial hard-line position and said Canada and Mexico could be exempt if NAFTA negotiations went well.
Now, the exemption has kicked in before those negotiations are over, though the Trump administration will no doubt attempt to use the possible threat of tariffs as leverage in ongoing talks.
Trump is also using the tariffs as a way to try and get other countries to negotiate on trade:
“If the same goals can be accomplished by other means, America will remain open to modifying or removing the tariffs for individual nations, as long as we can agree on a way to ensure that their products no longer threaten our security,” said Trump.
While Trump has rightfully criticized China for dumping tons of cheap steel on the market in an effort to destroy their competitors, his targeting of Canada with tariffs didn’t make much sense. After all, Canada and the US have almost perfectly balanced trade in steel.
Trump had also used national security as a justification for imposing the tariffs. While it may seem odd at first glance, the national security argument has been put forth by many people, who have noted that a country without a strong capacity to produce steel would be unable to defend themselves in case of a war.
After all, imagine if there was a significant conflict between the US and China, but China had all the steel capacity and the US had none.
That said, because the US and Canada are close allies, reducing steel imports from Canada is tough to justify from a national security standpoint, unlike imports from China and other nations that are not allied with the US.
In the video below, you can watch Trump’s tariff announcement:
Photo – YouTube