Mara Lee

Jerry Dias, national president of Canada's UNIFOR syndicate, said that before NAFTA, Canada had a small trade surplus in goods with the world, but now it has a $120 billion deficit. He said that General Motors, while closing plants in Canada, doubled its capacity in Mexico. Mexican consumers buy 240,000 GM vehicles a year, and Mexico is on the cusp of producing 1 million vehicles, he said. "And guess where those jobs come from? Canada and the United States." Dias said Canada has lost 500,000 manufacturing jobs in the nearly 25 years that NAFTA has been in place. "Tell me why I should celebrate?"

President Donald Trump told reporters at the White House Feb. 22 that he wanted the Chinese delegation to tell China's president "that if I see progress being made, substantial progress being made, it would not be inappropriate to extend that deadline, keep it at 10 percent instead of raising it to 25 percent. And I would be inclined to doing that." He was referring to the 10 percent tariffs on Chinese goods set to rise to 25 percent March 2 if no other deal is reached (see 1902190044).

Kentucky Gov. Matt Bevin says there shouldn't be steel and aluminum tariffs on Canadian products, but expressed confidence that the Trump administration will make the situation right eventually. Bevin is a Republican who leads a state that is third-highest in auto industry jobs as a proportion of the workforce. "I wish people would just have patience," he said at a Feb. 21 event sponsored by the Canadian American Business Council. He suggested the reason the tariffs are still in place is "there's a limited amount of bandwidth" at the Office of the U.S. Trade Representative, and they have "a limited amount of ability to fight all these fires at once."

Canada's Ambassador to the U.S. David MacNaughton said he thinks U.S. and Canadian negotiators will resolve Section 232 tariffs on steel and aluminum "in a short while," and then reiterated the prediction, saying it will be resolved soon. MacNaughton, who was speaking Feb. 21 at an event sponsored by the Canadian American Business Council, said getting the tariffs lifted "is No. 1, 2 and 3 on my agenda here."

Mexican Ambassador to the U.S. Martha Barcena said several Democrats in Congress have asked her about the exclusivity period for biologics in the new NAFTA -- a provision that is also not popular in the Mexican Senate. "We accepted this in the negotiation," she said. "We may not have a perfect agreement, but it is a good agreement." She added that since biologics are the future of prescription medicines, from a Mexican perspective, "the less time of protection, the better. In a way, it was one of the big concessions of Mexico." She said that those who are opposed to the biologics provision, because they believe it will make drugs more expensive for consumers, should ask Office of the U.S. Trade Representative officials if they are willing to change it.

When President Donald Trump decided to renegotiate NAFTA, "the threat of this agreement unraveling forced the business community to up its game," said Pete Sheffield, a lobbyist for Enfield, an oil and gas pipeline operator. David Woodruff, who represents CN, a Canadian-U.S. railway company, said that CN representatives met with more than 130 members, as they realized they " needed to be on the offense."

U.S. Trade Representative Robert Lighthizer and Japan's Economic and Fiscal Policy Minister Toshimitsu Motegi are planning for meetings in April and May, with an aim of defining the scope of trade talks before President Donald Trump meets with Japanese Prime Minister Shinzo Abe in late May, according to a report in Nikkei Asian Review. "Tokyo believes that by starting trade talks in the spring it can dodge [Section 232 auto] tariffs for the time being. But there are concerns that Trump could play the tariff card nonetheless if Japan's approach fails to satisfy," the article said. A USTR spokeswoman said it has no announcement on the next meeting between Lighthizer and Motegi.

The act that funds the Department of Homeland Security for the rest of the fiscal year provides more than half a billion dollars for more non-intrusive imaging equipment in in-bound lanes at the Mexican border, as well as $6 million for equipment for outbound traffic. It's the single biggest-ticket item that affects trade shipments, but there are many others: $10 million for ACE enhancement that will include post-core development and collections, and $2 million for the Office of Trade for targeting.

Trade is critical to manufacturing's success, because only 5 percent of the world population is in the United States, the head of the largest industrial trade group said Feb. 20. "If our economy is going to succeed, if we’re going to stay on top, we need to sell the things Americans make to those people [around the world] -- before someone else does," National Association of Manufacturers CEO Jay Timmons said in Houston on a speaking tour promoting manufacturing careers. "Being part of a strong world economy raises standards of living here at home and reduces poverty around the globe." He said manufacturers are counting on Congress to ratify the new NAFTA, known as the U.S.-Mexico-Canada Agreement, quickly, because Canada and Mexico are America's most important trading partners. And, he added, "we want to see the administration come to an agreement to hold China accountable. China cheats -- plain and simple. And it hurts us here in America. And the tariffs on their products and on ours? Well, they hurt manufacturers, too. China is the most challenging market in the world -- but it also has big opportunities. So, a trade agreement between the two countries would not only fix those problems and set new rules -- it would be historic."

The signals that tariffs will not go up on $200 billion worth of Chinese imports on March 2 is a small relief for businesses, according to Venable partner Lindsay Meyer, but they're still challenged by the difficulty "of forecasting what the second half of this year will present." Some importers that work with Venable are getting their suppliers to shoulder some of the additional tariff costs; others are declining to enter two-year contracts unless there's the ability to reopen the deals if tariffs increase. "The companies, they’re making their plans cautiously," she said. "I think the anxiety level isn’t at a level 10 that it was, but it certainly hasn’t dropped down below 5."