Politics Prolongs Tariff Uncertainty For The Construction Industry

Republicans in the Senate and Democrats in the House are rising up in opposition to ratification of President Trump’s newly negotiated trade treaty with Canada and Mexico over the Trump Administration’s refusal to honor its promise to lift steel and aluminum tariffs imposed on imports from those two countries. In particular, Trump’s 25% tariff on imported steel has led to a profit crunch on construction contractors and price increases for their customers.

President Trump promised to lift the tariffs as soon as negotiations over the new treaty, called USMCA by the Trump administration, once the agreement was negotiated, but at the last minute his administration determined to leave the tariffs in place until Mexico and Canada agree to quotas limiting the volume of imported steel and aluminum coming into the country from their countries. Senate Finance Committee Chairman Charles Grassley (R. Iowa) is insisting that the steel and aluminum imposts be removed before the USMCA treaty can get onto the Senate floor for the required Senate approval.

President Trump has threatened to terminate the existing NAFTA trade treaty among the three nations if the new agreement does not come up for a Senate vote. Senator John Cornyn (R. Tex.) warns Trump’s threat could scuttle the entire trade treaty. “I don’t think trying to jam Congress is a good idea,” he says. Senator Patrick Toomey (R. Pa.) opposes the treaty because of the 16 year sunset provision, and restrictions on the dispute resolution process it contains.

House Speaker Nancy Pelosi opposes the deal as the result of what she characterizes as its lack of strict enforcement provisions. She explains: “You can say all the nice things you want in the world and write them up, but unless you have enforcement you’re just going down a path that isn’t going to be helpful to America’s workers.”

Meanwhile, businesses in the construction industry will continue to suffer the uncertainty regarding when, if ever, Trump’s tariffs imposed in the name of national security will ever be lifted as the president promised when he imposed them without Congressional approval.