Background on the Business Roundtable and its Members
The Business Roundtable (BRT), an association of CEOs from leading U.S. companies, represents all sectors of the American economy. These CEOs head U.S.-based companies that generate one in four U.S. jobs and nearly a quarter of the United States’ Gross Domestic Product (GDP).
Tariffs Targeted by the CEOs
The tariffs in question include:
- 50% tariffs on steel, aluminum, and copper under Section 232 of the Trade Expansion Act of 1962.
- 25% and 35% tariffs on goods originating from Mexico and Canada, respectively, that do not comply with the USMCA due to alleged non-cooperation on migration and fentanyl.
BRT’s Request to the USTR
In a letter to the United States Trade Representative (USTR), the BRT urged the removal of these tariffs, stating that they are counterproductive to U.S. economic and national security interests.
The organization emphasized that a tariff-free structure, including the ongoing exemption from goods processing taxes, should remain fundamental to U.S. trade.
BRT requested that all goods meeting the USMCA standards be exempt from tariffs not explicitly authorized by the USMCA, including those imposed under Section 232 of the Trade Act of 1962 and the International Emergency Economic Powers Act (IEEPA).
Impact of Tariffs on U.S. Trade
Since the implementation of the USMCA, intraregional trade in goods and services has grown by 37%, primarily driven by industrial sector growth.
However, since March 2018 when the U.S. imposed tariffs on Canada and Mexico under Section 232 and IEEPA, there has been a 7.3% decrease in bilateral trade, with more adverse effects on U.S. exporters (an 8.9% drop in exports and a 6.1% decrease in imports).
Benefits of Restoring Preferential Trade Status
Restoring full access to USMCA preferential trade status will increase N. American commerce, strengthen reliable supply chains with trusted partners, and promote U.S. economic security interests.
By restoring preferential treatment for all USMCA-compliant products, trade supply and commerce with Mexico and Canada—which have agreed on high-level trade standards and committed to improving them through joint reviews and mechanisms like the USMCA Competitiveness Committee and technical committees such as the Goods Trade, Facilitation of Trade, and Technical Barriers to Trade Committees—will be enhanced.
These USMCA institutions provide the U.S. with the advantage of ensuring that any new concerns are appropriately prioritized, thus maintaining current standards and opportunities for improvement, always backed by national interests.
Canada and Mexico’s Commitment to Trade
The BRT acknowledged that Canada and Mexico continue to demonstrate a firm commitment to harmonizing their measures against non-trade policies and practices of other countries, including those subject to Section 232 actions.
Both nations have increased tariffs on steel and iron products. Canada has imposed 100% tariffs on electric vehicle imports, aligning with the U.S. Section 301 tariffs on these vehicles.
Mexico has suspended electric vehicle (VE) tariff exemptions and proposed 10-50% tariffs on various products from non-free trade agreement countries, including steel, aluminum, automobiles, plastics, and furniture.
Through these coordinated efforts, the U.S. industrial base can strengthen alongside its USMCA partners. In return for this coordination, the parties should reaffirm their commitment to preferential trade among themselves.
Key Questions and Answers
- Who are the CEOs making this request? Over 200 CEOs from leading U.S. companies, represented by the Business Roundtable (BRT).
- What tariffs are they asking to remove? Tariffs under Section 232 of the Trade Expansion Act of 1962 and the International Emergency Economic Powers Act (IEEPA) on goods from Mexico and Canada.
- Why are these tariffs counterproductive? They negatively impact U.S. economic and national security interests, as stated by the BRT in their letter to the USTR.
- What has been the impact of these tariffs on U.S. trade? Since their implementation, there has been a 7.3% decrease in bilateral trade with Canada and Mexico, affecting U.S. exports more significantly.
- What benefits will restoring preferential trade status bring? It will increase N. American commerce, strengthen supply chains with trusted partners, and promote U.S. economic security interests.
- How have Canada and Mexico responded to these tariffs? Both nations have harmonized their measures with the U.S., imposing tariffs on specific products and aligning with U.S. trade policies.
