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Tariffs Less About China; More About NAFTA, Canada

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Tariffs Less About China; More About NAFTA, Canada

A former USDA trade chief in the Bill Clinton Administration discounts any national security justification by the Trump Administration for the President’s announcement Thursday of import tariffs on steel and aluminum. Former USDA trade adviser Paul Drazek, says the tariffs are less about China and more about a connection with NAFTA and Canada, the largest steel and aluminum exporter to the US.

Drazek argues the national security justification is “bogus” and only invites retaliation against U.S. agriculture. “Once you start using national security for import protection, then what’s to stop countries from saying, ‘Well food security is national security,’ for them and they need to make themselves more self-sufficient. Especially if the US is no longer going to be a reliable supplier.”

Trump trade adviser Peter Navarro and Commerce Secretary Wilber Ross may now be looking for a ‘carve-out’ for Canada, that may only invite others to seek the same.

In the meantime, China may be less likely to retaliate against U.S. soybeans and other farm goods, given its small share of the U.S. steel market, though Drazek warns, the Chinese should not be underestimated and could still impose punishing sanctions against U.S. agriculture.