The U.S. recently imposed a 25 percent tariff on steel and a 10 percent tariff on aluminum imported from Canada, Mexico and the European Union. Unfortunately, tariffs are complicated.

    For example, in the short run, they are likely to hurt the Texas economy. Mexico and Canada are the two largest export markets for Texas products, and both countries have started to impose retaliatory tariffs on U.S. goods, including agricultural products.

    In addition, the tariffs operate  basically as a  surcharge, one paid by U.S. consumers. Indeed, t he U.S. Chamber of Commerce reports that the cost of steel in the U.S. is now 50 percent higher than in Europe.  The higher costs also are a counter to the tax cuts recently passed, reducing the tax cuts' ability to stimulate job growth and personal income.  

    If the tariffs continue for the long run, companies that are large users of steel, such as GM, would have the incentive to slow production in the U.S. and increase it in Canada and Mexico, where there is not a corresponding tariff on finished products containing steel. 

    WHAT YOU CAN DO: P lease take a minute and email your thoughts to our federal elected officials. Click here to easily send them an email. 

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    The Trump Administration had intended to have the North American Free Trade Agreement (NAFTA) renegotiated by the end of May, but was not successful. 

    We recently spoke with a  deputy assistant U.S. Trade Representative, who told us at then that of the 22 chapters in NAFTA, the parties had reached full agreement on only nine. Further, it is widely reported that the U.S. has four points which Canada and Mexico consider non-starters. 

    The President has said he would like to negotiate separate agreements with Mexico and Canada. That might work, because the current NAFTA agreement was the combination of two bi-lateral deals. On the other hand, the President also maintains that if the U.S. can't negotiate new agreements, he is ready to terminate NAFTA.  Mexico, meanwhile, has just elected a new president, Andres Manuel López Obrador. He is not known to be a supporter of U.S. trade, and his approach is not expected to be positive on the negotiations. 

     The current NAFTA treaty is not perfect, but it is still good for Texas. The good news is that NAFTA will likely continue as it is for now -- even if the parties were able to reach agreement today, the Senate would note vote on it until November, during the "lame duck" session.

    Can Congress stop President Trump from withdrawing from NAFTA? Precedents are far from clear. Vox recently published an article where they polled six experts on the question; their conclusion was a resounding "Probably." 

    WHERE WE STAND:  The Chamber will continue to lobby against blowing up NAFTA, and in support of completing the negotiated changes or leaving the old agreement in place.