Sen. Peters to Trump: Pump brakes on steel dumping

Keith Laing
Detroit News Washington Bureau

Washington — U.S. Sen. Gary Peters warned President Donald Trump about the harm that steel-dumping inflicts on the auto parts industry during a White House meeting on trade Tuesday.

Peters, who was one of 20 senators who attended at the White House meeting, took the opportunity to have an audience with Trump to press the president to address “unfair” trade practices like steel dumping, where foreign makers export steel to the U.S. at below-market prices in an effort to drive out domestic competitors.

The Bloomfield Township Democrat boasted to Trump that Michigan has “the best workers.” Trump interjected in response: “The problem is we didn’t have good policy.” Peters, who was one of only four Democrats who met with the president Wednesday, then warned Trump of the impact of dumping on the auto parts industry.

“We have probably more jobs in auto parts in Michigan than any other of the industrial sector, so they all go together,” Peters told Trump. “We’ve got to deal with the steel pricing issue. I agree with everything that’s been said here. But then we can’t have the dumping of auto parts that will take away Michigan jobs as well as jobs around the country.”

Trump responded: “You do have great workers. The problem is you didn’t have good policy, and that’s why so many jobs left. But now they’re coming back. And they like coming back to Michigan.”

Peters also asked Trump to take a look at allowing the Commerce Department to initiate trade enforcement actions for smaller industries.

“In Michigan, for example, we have cherries,” Peters said. “Right now, we’ve got the dumping of cherries that’s making it very difficult for our growers in Michigan. But they don’t have the resources to bring those kinds of enforcement actions.”

“You have my help,” Trump said. “I think it’s a fantastic idea. Because you’re right – they can’t hire the lawyers, it’s too small. But it’s – you know, in a double way, it’s very, very big.”

Trump then turned to U.S. Commerce Secretary Wilbur Ross and asked: “Wilbur, are you working on that?” Ross responded: “Yes, sir.”

The meeting took place against a backdrop of the Trump administration’s push for major changes to the North American Free Trade Agreement that auto industry representatives have said would make cars more expensive to produce in Canada or Mexico, putting them at a disadvantage against foreign-owned competitors.

Under controversial NAFTA changes proposed by the Trump administration, a Chrysler Pacifica minivan built in Windsor could be hit by tariffs when trucked across the Detroit River. U.S. negotiators have proposed increasing the minimum percentage of parts that must be made in the U.S., Canada or Mexico — from the current 62.5 percent to 85 percent — in order to escape tariffs when imported to this country.

And American negotiators want to require that 50 percent of parts must come from the United States. That would mean future models of the Canadian-built Pacifica could be hit by import taxes when sent here. Only 44 percent of the components in the Pacifica originate in the U.S., according to an American University study. Canada and Mexico have thus far rejected what they see as hardline proposals from the U.S.

The sixth round of NAFTA talks wrapped up in Montreal last month with seemingly little hope for a possible agreement. The three nations have already pushed the deadline for hammering out a new agreement into early 2018. Now they say the talks could stretch as far as 2019.

The next round of NAFTA talks is scheduled for Feb. 26 to March 6 in Mexico.

Automakers have pushed back strongly against the Trump administration’s efforts to upend NAFTA provisions they find favorable. Groups that lobby in Washington for Detroit’s manufacturers and their foreign-based counterparts, as well as parts manufacturers and dealerships, banded together in a rare show of unity to form a coalition called “Driving American Jobs” to fight the Trump administration’s proposed NAFTA changes.

They say NAFTA has been integral to the car industry’s resurgence, and that abandonment of the trade agreement could have the unintended effects of killing U.S. jobs, increasing the price of cars and disrupting supply chains.

Renegotiating NAFTA was a central tenet of Trump’s campaign as he promised voters to bring back jobs, especially in auto-dependent states in the Midwest. NAFTA was enacted in 1994 to create a free-trade zone between the U.S., Mexico and Canada.

On the campaign trail, Trump said he would end the trade pact with Canada and Mexico and slap a 10 percent to 35 percent tariff on vehicles and parts made in Mexico that are imported into the U.S. if NAFTA renegotiation is not a success. That could add $5,000 to $15,000 to the price of a car.

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Twitter: @Keith_Laing