Donald Trump links planned steel tariffs to Nafta talks

 In U.S.

The US struck a markedly more conciliatory tone on the renegotiation of the North American Free Trade Agreement in Mexico City, even as US president Donald Trump vowed to play hardball with Canada and Mexico by linking his plans for tariffs on imports of aluminium and steel to a successful deal.

Robert Lighthizer, the US trade representative, said that with just six out of a potential 33 chapters closed so far, progress had been slower than hoped but added: “If the political will is there, I am certain we have a path to rapid and successful completion.”

He told reporters later: “We probably have one month, one-and-a-half months, to get an agreement in principle” because of Mexican presidential elections in July and a US midterm vote in November.

But he made clear that he saw the threat of tariffs on steel imports as a carrot. “In my view, it’s an incentive to get a deal,” he said.

Mr Trump earlier alarmed his Nafta partners, who had been hoping for an exemption from the planned tariffs on steel and aluminium, by tying that explicitly to a deal. “We have large trade deficits with Mexico and Canada. NAFTA, which is under renegotiation right now, has been a bad deal for USA. Massive relocation of companies & jobs. Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed,” he tweeted on Monday.

He also said Canada needed to “treat our farmers much better” and that “highly restrictive Mexico must do much more on stopping drugs from pouring into the US”.

“They have not done what needs to be done. Millions of people addicted and dying,” the president said, adding: “To protect our Country we must protect American Steel! #AMERICA FIRST”.

Mexico’s foreign minister fired back, saying that tackling the drug trafficking problem that has plagued the US-Mexico border for decades was a joint endeavour.

“Only working together and addressing supply and demand we can stop the illegal flow of drugs, cash and weapons going both ways,” Luis Videgaray tweeted.

Ildefonso Guajardo, Mexico’s economy minister, later added: “México shouldn’t be included in steel & aluminium tariffs. It’s the wrong way to incentivize the creation of a new & modern #NAFTA,”.

Mr Trump is also facing resistance from fellow Republicans in Congress who say the tariffs would hurt the president’s efforts to boost US economic growth ahead of midterm elections this year.

“We are extremely worried about the consequences of a trade war and are urging the White House to not advance with this plan,” said a spokeswoman for House Speaker Paul Ryan.

But Mr Trump indicated on Monday that he remained determined to push ahead with the plan.

“We are not backing down,” he told reporters as he welcomed Israeli prime minister Benjamin Netanyahu at the White House.

The early morning intervention from Mr Trump marked another sign of the president’s willingness to escalate his trade fight with traditional US allies. Over the weekend he aimed his fire at the EU, threatening to impose new taxes on European carmakers if Brussels retaliated against his steel and aluminium tariffs.

Mr Trump has repeatedly threatened to pull out of Nafta, which covers a quarter of the global economy. The US, Canada and Mexico began renegotiating the 24-year-old pact last August and were due to conclude the seventh round of negotiations on Monday with a ministerial meeting in Mexico City.

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