As the Trump administration hits Canada with a 20% tax on imports of softwood lumber, U.S. Commerce Secretary Wilbur Ross indicated Tuesday the move was meant to prime the pump for a renegotiation of the North American Free Trade Agreement (NAFTA).
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"NAFTA has not worked as well as it should," Ross said, adding the administration has put âCongress on noticeâ that it intends to renegotiate the deal.
As President Trump and his cabinet hammer down on trade imbalances including âdumpingâ of materials such as steel, lumber and aluminumâthe latter is expected to be addressed Thursday according to Rossâthey appear to be weakening the trade agreements they have in place until they have the complete authority to move ahead with a full renegotiation.
Ross said the effort to broker a new deal with Canada and Mexico has been âstalledâ until Congress grants the president trade promotion authority (TPA). TPA is a fast-track process to allow âan up or down voteâ with no amendments on proposed legislation.
While hosting Canadian Prime Minister Justin Trudeau at the White House in February, the president said he wanted to âtweakâ NAFTA mainly due to the trade imbalance with Mexico, not Canada.
âWe have a very outstanding trade relationship with Canada. Weâll be tweaking it. Weâll be doing certain things that are going to benefit both of our countries. Itâs a much less severe situation than whatâs taking place on the southern border,â Trump said during the press conference with Trudeau.
Ross said he did not believe this new tariff on Canadian lumber would impact the relationship between President Trump and Prime Minister Trudeau.
On Tuesday morning Trump also tweeted about Canadaâs dairy supply-management policies and their impact on U.S. producers.
Canada has made business for our dairy farmers in Wisconsin and other border states very difficult. We will not stand for this. Watch!— Donald J. Trump (@realDonaldTrump) April 25, 2017
While the U.S. flexes it muscles in the world economy, Ross insisted he did not expect a trade war to break out between the two countries.
âI donât know what it is that they could do that would be a legitimate action [in retaliation],â he said.