Trump still is hoping to use the threat of auto tariffs to pressure Japan and the European Union into making concessions in ongoing trade talks. “If agreements are not reached within 180 days, the president will determine whether and what further action needs to be taken,” White House press secretary Sarah Sanders said in a statement.
In imposing the metals tariffs and threatening the ones on autos, Trump was relying on a rarely used weapon in the US trade war arsenal — Section 232 of the Trade Expansion Act of 1962 — which lets the president impose tariffs on imports if the Commerce Department deems them a threat to national security.
But the steel and aluminum tariffs were also designed to coerce Canada and Mexico into agreeing to a rewrite of North American free trade pact. In fact, the Canadians and Mexicans did go along last year with a revamped regional trade deal that was to Trump’s liking. But the administration had refused to lift the taxes on their metals to the United States until Friday.
The new trade deal — the US-Mexico-Canada Agreement — needs approval the legislatures in the US, Canada and Mexico. Several key US legislators were threatening to reject the pact unless the tariffs were removed. And Canada had suggested it wouldn’t ratify any deal while the tariffs were still in place.