May 24, 2017

Metals Industry Has Stake in NAFTA Renegotiations

Robert Lighthizer has gained Senate approval to assume the position as U.S. Trade Representative, a move that earned praise from metals industry trade groups such as MSCI and AISI. A long-time veteran of the trade wars, Lighthizer didn’t waste time getting settled into his new office.

Three days after being sworn in, Lighthizer notified Congress of the Trump administration’s intention to renegotiate the North American Free Trade Agreement. “Through these negotiations, the United States seeks to support higher-paying jobs in the United States and to grow the U.S. economy by improving U.S. opportunities to trade with Canada and Mexico,” Lighthizer’s office claimed.

The plan to revisit NAFTA is not surprising, given how complaints about the trade deal were central to the president’s campaign. On the trail, Candidate Trump labeled it the “worst deal ever” and vowed to tear it up if elected. His hard stance on trade was almost certainly a factor in his victory, winning greater support in the industrial Midwest than past Republican candidates.

But for the domestic metals industry, the value of NAFTA is one area where the administration and supply chain players are not in complete sync. Many service centers and producers have reaped the benefits of the ease of trade between the three countries. Several of the distribution industry’s leading companies have taken advantage of that trade flow by establishing profitable ventures in Mexico’s industrial centers. A major overhaul of the pact is a major concern to them, and others.

Since his inauguration, Trump’s rhetoric on NAFTA has softened, following meetings with leaders from Mexico and Canada, as well as others in business. That gives hope that the deal, which economists agree has generally helped all three countries, will simply be given the tweaks necessary for any 23-year-old agreement, rather than reducing it to ashes.


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Monday, October 16, 2017