Trump vows Mexico, Canada steel tariffs without 'fair' NAFTA deal

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Canadian Foreign Minister Chrystia Freeland, Mexican Economy Minister Ildefonso Guajardo and U.S. Trade Representative Robert Lighthizer take part in a joint news conference on the closing of the seventh round of NAFTA talks in Mexico City, Mexico March 5

Canadian Foreign Minister Chrystia Freeland, Mexican Economy Minister Ildefonso Guajardo and U.S. Trade Representative Robert Lighthizer take part in a joint news conference on the closing of the seventh round of NAFTA talks in Mexico City, Mexico March 5

web_photo_NAFTA_06032018

Canadian Foreign Minister Chrystia Freeland, Mexican Economy Minister Ildefonso Guajardo and U.S. Trade Representative Robert Lighthizer take part in a joint news conference on the closing of the seventh round of NAFTA talks in Mexico City, Mexico March 5

Canadian Foreign Minister Chrystia Freeland, Mexican Economy Minister Ildefonso Guajardo and U.S. Trade Representative Robert Lighthizer take part in a joint news conference on the closing of the seventh round of NAFTA talks in Mexico City, Mexico March 5

WASHINGTON - US President Donald Trump vowed Monday not to exempt Mexico and Canada from new steel tariffs without a "fair" trade deal, but his chief negotiator warned the trio&39;s talks were not living up to expectations.

Speaking as US, Mexican and Canadian trade officials gathered in Mexico City to wrap up the seventh round of talks aimed at revamping the North American Free Trade Agreement (NAFTA), Trump doubled down on threats he made on Twitter early Monday.

"No, we&39;re not backing down," he told reporters after an Oval Office meeting with embattled Israeli leader Benjamin Netanyahu. "There will be tariffs on steel for Canada and for Mexico."

The US leader, who prides himself on his ability to negotiate business deals -- and who said last week trade wars were "good, and easy to win" -- linked his planned steel and aluminium tariffs to the ongoing talks with Mexico and Canada in his latest anti-NAFTA rampage on Twitter.

"Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed," he said in one of a series of morning tweets.

Hours later, his top negotiator, US Trade Representative Robert Lighthizer, warned in Mexico City that the latest talks had been disappointing.

"In spite of (our) hard work, we have not made the progress that many had hoped in this round. We have closed out only three additional chapters," Lighthizer told a press conference.

"To complete NAFTA 2.0, we will need agreement on roughly 30 chapters. So far, after seven months we have completed just six."

Canadian Foreign Minister Chrystia Freeland for her part vowed to fight fire with fire if Trump went ahead with his tariff plans.

"Canada will take appropriate, responsive measures to defend our trade interests and our workers," she said.

Canada, which has the most to lose as the top source of US steel to the US market, has called the tariffs "unacceptable."

Twitter buff

Trump&39;s surprise announcement last week that he plans to impose tariffs of 25 percent on steel imports and 10 percent on aluminum sparked a fierce global response.

Canadian and Mexican officials had raised the possibility the neighboring nations could be exempt, but Trump rejected that possibility and raised the stakes by holding the NAFTA talks hostage to the tariffs.

Mexico&39;s Economy Minister Ildefonso Guajardo suggested Trump may not follow through.

"With this (US) administration, it&39;s important to wait for them to go from tweets to action. There&39;s still no presidential decree," he said.

The United States in fact maintains a trade surplus with Canada that amounted to nearly $8 billion in 2016, and nearly $3 billion in the first nine months of 2017. 

The US has a deficit with Mexico that was $63 billion in 2016, and $52 billion in the first three quarters of last year.

Trump administration officials frequently refer to the deficit in goods alone, excluding the offset from dominant US services exports such as banking and insurance.

Retaliation

Trump also criticized the European Union for trade barriers on US companies and repeated his threat to slap tariffs on European car imports if Brussels retaliates against the steel tariffs.

"People have to understand, our country on trade has been ripped off by virtually every country in the world," even by "people that we think are wonderful," Trump said. 

Repeating his concern about the US trade deficit of $800 billion last year, he said "the biggest problem is China."

While Trump said he did not think there would be a trade war, US trading partners already are preparing to retaliate, and have pledged to file a dispute at the World Trade Organization.

French President Emmanuel Macron said the European Union must "react quickly" to US plans that clearly breached WTO rules. 

Germany and Britain both sounded the alarm over damage to their trade relationships with the US.

The European Union has said it is drawing up measures against leading US brands like Harley-Davidson motorcycles and Levi&39;s jeans.

Trump said the EU has "trade barriers far worse than tariffs," and again threatened to "tax their cars" if they go through with their response.

That is just the kind of tit-for-tat reaction that economists warn could spark a trade war at a time when the US and global economies have only recently returned to firmer footing.