June 26, 2018

Steel and Aluminum Tariffs

Issue Overview

The Trump administration will proceed with tariffs on steel and aluminum from the European Union, Canada and Mexico. The tariffs take effect June 1 and are expected to challenge ongoing NAFTA negotiations. As a result, all three countries have announced retaliatory tariffs on numerous U.S. imports.

Department of Commerce Secretary Wilbur Ross made the announcement May 31, citing national security concerns. “Without a strong economy, you can’t have strong national security,” he said. “The president’s overwhelming objective is to reduce our trade deficit.”

According to the Washington Post, officials from the three countries – among Washington’s closest allies for decades – dismiss the idea that their shipments threaten domestic security. “Europe, Canada, and Mexico are not China, and you don’t treat allies the same way you treat opponents,” said Sen. Ben Sasse (R-Neb.).

Trade talks with EU, Canada and Mexico will continue as the tariffs – 25 percent on imports of steel and 10 percent on aluminum – take effect. Other trading partners, including Argentina, Australia, Brazil and South Korea have already negotiated voluntary export limits.

NAFEM’s Position

The commercial foodservice equipment and supplies industry depends on a reliable, global supply chain to make quality products, effectively compete throughout the world and employ thousands of people in North America. Tariffs have already complicated these business fundamentals through price increases and the unintended consequence of creating supply shortages, which may become more significant, constraining production of finished goods.