OTTAWA — Five things to keep in mind in the wake of Friday’s news that Canada and the U.S. reached an agreement to end punitive American tariffs on steel and aluminum exports:
1. The devil is in the details. So far, it’s not clear what concessions Canada made in order to convince a famously stubborn White House to abandon the tariffs, which survived not only the reaching of the U.S.-Mexico-Canada Agreement last September, but also its ceremonial signing two months later in Buenos Aires. What, exactly, prompted the self-proclaimed “Tariff Man” to finally stand down? All that’s known is that Canada agreed to “prevent” the import of unfairly subsidized or “dumped” steel, and work with the U.S. to prevent transshipment — foreign steel that moves through either country to the other. Reaching an “agreed-upon process” to monitor metals trading is also part of the deal, which allows the U.S. to reimpose tariffs should import levels spike.
2. Next, the new NAFTA. never mind Democratic intransigence on Capitol Hill; the tariffs emerged in recent months as the number-one obstacle to getting the USMCA ratified not only in the U.S., but in Canada and Mexico as well. It’s unknown if the tariff detente will jar loose the long-standing logjam in Congress, where conventional wisdom says many Democrats are reluctant to give President Donald Trump even a whiff of victory as the 2020 election approaches. However, there are signs that opposition may be dwindling: House of Representatives Speaker Nancy Pelosi, widely seen as holding the fate of the agreement in her hands, sent positive signals about her party’s desire to “get to Yes” after a “productive meeting” earlier this week with U.S. Trade Representative Robert Lighthizer.
3. The China conundrum. Canada has been caught in the crossfire between the U.S. and China ever since Huawei chief financial officer Meng Wanzhou was detained in Vancouver late last year at the behest of the U.S. Justice Department. Meng, who is caught up in an American indictment that accuses Huawei of violating U.S. sanctions against Iran, is awaiting an extradition hearing to determine whether she will be sent stateside to face charges. China has since detained two Canadians on claims of espionage and sentenced a third to death for drug smuggling. Friday’s tariff agreement, which enlists Canada’s help in policing the North American steel market against Chinese dumping, could be seen as pushing Canada even deeper into America’s corner.
4. Canada’s election. With voters headed to the ballot box this fall, polls suggest Prime Minister Justin Trudeau is in trouble. But Trump is deeply unpopular, and the tariffs haven’t helped; Friday’s news will give the governing Liberals the chance to portray themselves as the only party with experience — and success — in dealing with the famously unpredictable and combative commander-in-chief. Look for the hard-charging Conservatives to do their level best to counter that perception when the House of Commons comes back May 27 after next week’s break.
5. America’s election. As 2020 approaches, look for Trump to mount a full-court press to get the USMCA ratified in Congress and give him badly needed campaign-trail ammunition. Will the Democrats, who control the House of Representatives and have never been known as free-trade fans, be willing to hand him a victory? Or are they content to fight other, higher-profile battles, wary of the blowback from constituents who want to see the deal passed?