Industry Outlook

U.S. Ends Metal Tariffs for Neighbors

By Pan Demetrakakes, Senior Editor

May 20, 2019

An end to tariffs on steel and aluminum imported from Canada and Mexico is being welcomed across the food industry – but a new tariff on Mexican tomatoes will remain in place.

The Trump administration announced May 17 that it was dropping tariffs of 10% against imported aluminum and 25% against steel from America’s two neighbors. The measures had been put into place in March 2018, supposedly as a national security measure to protect the domestic metal industry.

The end of the tariff was hailed by both users of metal packaging and exporters of food that was subjected to retaliatory tariffs.

The deal involved Canada and Mexico agreeing to drop the retaliatory tariffs and to take measures against other countries, especially China, using them as a conduit to export subsidized steel and aluminum to the U.S. The U.S. still has metal tariffs against China and the European Union.

The metal tariffs were seen as a major obstacle, both outside and within the U.S., to passage of the U.S.-Mexico-Canada Agreement (USMCA), Trump’s replacement for the North American Free Trade Agreement.

Meantime, the U.S. Commerce Department announced a suspension of an agreement with Mexico that will result in a 17.5% tariff for fresh Mexican tomatoes. The 2013 agreement had kept the U.S. from pursuing an anti-dumping investigation against Mexican growers. 

An analysis funded by the Fresh Produce Association of America found that the tariff could cause domestic tomato prices to rise between 40% and 85%. Both Mexico and the U.S. say negotiations to resolve the situation are ongoing.