In light of ongoing negotiations to modernize the North American Free Trade Agreement (NAFTA), President Trump signed a proclamation authorizing proposed tariffs on imported steel and aluminum. The Trump Administration’s most recent trade action, a power granted by the Trade Expansion Act of 1962 , follows the conclusions of an investigation conducted by the Department of Commerce which determined that imported metals propose a threat to national security.

Effective March 23, 2018, the United States will levy a 25% tariff on steel and a 10% duty on aluminum. The proclamation mandates tariffs on imported metals from all nations, with the exception of NAFTA member countries, Mexico and Canada. NAFTA has enabled Georgia to become globally competitive in industries such as automotive and agriculture. The production of agriculture contributes nearly $74.9 billion to the state’s economy annually. As reported by the state’s Department of Economic Development, within the last 10 years automotive products that are exported from Georgia-based companies have increased by 150%. Collectively, Georgia exports have increased to approximately 52% amounting to $35.6 billion in revenue. Senator David Perdue encouraged the administration to consider a targeted approach, “I know President Trump has a long-term game plan in mind. This is not a knee-jerk reaction around steel or aluminum. This is about the global situation. NAFTA is a great example of where the President backed up and gave us time to work out the details. He did this on the border adjustment tax last year too. I was very involved in discussions with the President about why the border adjustment tax wasn’t a good idea and he agreed.”

As the United States is the world’s largest steel importer, imposed tariffs would have an adverse effect on the nation’s economy. In 2017, the amount of steel imported to the U.S. was valued at an estimated $29 billion. The vast majority of the United States’ steel and aluminum supply is provided by Canada, followed by Mexico, the world’s 4th largest steel supplier. Steel and aluminum are key components of a thriving economy, as they are essential to agriculture and automobile manufacturing, architecture, and infrastructure.

As Georgia is home to many notable manufacturers within the automotive and agriculture industries, proposed tariffs could potentially result in increased costs and forced layoffs. With growing concerns of retaliation and trade wars, United States Senator, Johnny Isakson warned unintended consequences of trade restrictions, “Ultimately, trade wars do not solve the problems they are intended to address, but inevitably create more trouble. This new tax on American consumers will have lasting consequences and will impede the pro-growth agenda we have pursued. While there are some exemptions from the tariffs, the administration must go further to exempt additional key U.S. allies as well as inputs relied on by Georgia manufacturers. I will continue working to find a targeted path forward that addresses unfair trade policies with a narrow approach that does not harm American workers and consumers.”

As the state’s largest business advocate, the Georgia Chamber supports free trade agreements to expand worldwide market access to U.S. companies and their products. Aluminum and steel industries are critical to Georgia’s economy, as it is a long-standing Chamber position to oppose trade restrictions that prevent the elimination of duplicate layers of regulation that are overly burdensome and stifle economic growth.

On Wednesday, March 7th, Georgia’s Republican congressional delegation submitted a letter outlining concerns and recommendations for a targeted approach to ensure costs remain affordable for both providers and consumers. The Chamber commends our federal lawmakers’ continued efforts to protect businesses across the U.S. and in Georgia. As aluminum and steel are critical to American industries, the Georgia Chamber is dedicated to working with the United States Chamber and our congressional delegation to protect the beneficial incentives of free market trade.

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