USDA chief Sonny Perdue today came out in support of President Donald Trump’s trade policy tactics in proposing steep tariffs on steel and aluminum imports, but also stressed that the U.S. ag sector is rightfully concerned that it could suffer from foreign retaliation.
Perdue said the proposed tariffs on imported steel and aluminum have shaken up Mexico and Canada and will give the U.S. new leverage in the ongoing negotiations to rewrite the North American Free Trade Agreement as well as U.S. dealings with the European Union.
“I plan to tell the president he’s got them just where he wants them and let’s use this off-balance technique here to decide what we would like in exchange for that, whether it’s Mexico, Canada or our EU partners,” Perdue said at a forum at USDA headquarters.
Trump, in a Monday morning tweet, said he would consider giving an exemption for the tariffs – 25 percent for steel and 10 percent for aluminum – to Canada and Mexico if they agreed to a “new & fair NAFTA agreement.”
Canada is the largest foreign exporter of steel to the U.S. and Mexico is the fourth-largest, behind Brazil and South Korea.
Perdue said he doesn't know if the U.S. ag sector should be “soothed by the fact that he’s told Mexico and Canada this may be a way to get the NAFTA agreement done, using the steel tariffs in that way.”
But he also complained that Canada has been especially resistant to U.S. NAFTA proposals, such as a demand that the country dismantle its dairy supply management system and allow in more U.S. products.
Canadian Minister of Foreign Affairs Chrystia Freeland on Monday threatened retaliation for the proposed tariffs that the White House is expected to officially unveil in detail as early as Thursday.
European Trade Commissioner Cecilia Malmström told reporters Monday that the EU has already drafted a provisional list of retaliatory tariffs to slap on the U.S. if it goes through with the plan to tax imported steel and aluminum.
“On the list there are steel products, there are industrial products and there are agricultural products,” Malmström said, confirming that the list includes products like U.S. bourbon, peanut butter, cranberries and orange juice.
Despite his support for Trump’s steel and aluminum tariffs, Perdue said farmers, ranchers, ag equipment and food manufacturers were justified in their fears that retaliation will hurt their businesses.
“I think probably most of us in the agriculture sector are rightfully concerned and somewhat anxious over retaliatory measures,” he said.
The across-the-board tariffs might not be written in stone, though. When asked if Trump would be willing to moderate the proposal, Perdue responded: “I’m hopeful. I think there are some negotiating strategies here that could be very beneficial not only to agriculture, but the rest of the American economy.”
Much of the concern about retaliation could dissipate if Trump decided to exclude Canada, Mexico, the Europeans and others from the tariffs, and White House Press Secretary Sarah Huckabee Sanders said today that was a possibility.
"There are potential carve-outs for Mexico and Canada based on national security, and possibly other countries, as well, based on that process,” she said.
Trump is expected to formally approve the tariffs on Thursday. White House trade adviser Peter Navarro said the tariff proclamation will have a clause that does not impose the tariffs immediately on Canada and Mexico. “It’s gonna give us an opportunity ... to negotiate a great deal for this country," he said.
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