NAFTA Negotiations Stall After Aluminum And Steel Tariffs Are Imposed On Canada And Mexico

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As King and Spalding has previously reported, after the Trump Administration imposed Section 232 tariffs on imports in March 2018, the Administration temporarily exempted Canada and Mexico from the tariffs until June 1, 2018. In May, U.S. Secretary of Commerce Wilbur Ross said that the exemptions for Canada and Mexico were tied to the status of the NAFTA negotiations. On May 31, 2018, President Trump announced that their exemptions would expire on June 1, due to the slow progress in the negotiations.

The NAFTA renegotiations have taken much longer than the parties hoped. Initially, the parties expressed their hope that they would reach a deal by the end of 2017. When this deadline passed, they revised their expectations and sought to finalize a deal by April or May 2018. These expectations proved overly optimistic. Secretary Ross has stated that the United States hopes to continue productive trade negotiations with Canada and Mexico, but NAFTA renegotiations remain stalled. The Administration has reportedly begun to engage with Canada in one-on-one negotiations in an effort to reach separate agreements with Canada and Mexico.

In spite of slow progress in the negotiations and existing friction among the countries, the leaders of the three countries continue to express optimism that they can reach a deal. In June, President Trump opined that "we're getting there," and Canada's Foreign Minister Chrystia Freeland said that a "modernized win-win-win deal that benefits all three NAFTA partners is possible and we continue to work hard and patiently to achieve this outcome[.]" Minister Freeland also said that the negotiators "will be working hard over the summer[.]" Mexico's Foreign Minister Luis Videgaray said that he expected negotiations to continue again in July. Nonetheless, the prospects for a new NAFTA agreement being concluded soon are unclear.

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