Canada and Mexico got another month's reprieve this week as President Trump exempted both from previously announced steel and aluminum tariffs for another month. When asked about this recently, U.S. Commerce Secretary Wilbur Ross said that the negotiations were continuing, particularly around NAFTA, where speculation has been mounting that a deal is close to being done. Technically, all exemptions now are temporary, but President Trump has indicated that exemptions could become permanent in the context of a renegotiated NAFTA.
There has been some reporting recently that ties the macro topic of trade negotiations into a practical example: A suspension bridge — the Ambassador Bridge — that connects Detroit with Windsor, Ontario. More than 25 percent of all the merchandise trade between the U.S. and Canada crosses that bridge, to the tune of about $100 billion annually. For context, that figure is just under the entire amount of trade the U.S. does with the U.K. annually.
The bridge was built in 1929 and has the interesting distinction of being a very public infrastructure link that happens to be privately owned. Due to its age and the increasing trade volume between the two countries, it needs to be replaced. And as it happens, both the private bridge owner and the Canadian government are planning to build new bridges. To bring Canada's favorite pastime into the mix, the proposed Canadian bridge is being called the “Gordie" after the Canadian hockey star who spent most of his professional career with the Detroit Red Wings.
We all know that most bridges contain a lot of steel — and this is where the situation gets even more interesting. The private owners of the Ambassador Bridge are asking the administration to rescind a waiver issued in 2012 to the requirement that Canadian bridges must be constructed of U.S.-produced steel. And, to make things more complicated, one of the bidders on the construction contract is Aecon Group Inc., a Canadian company that is currently under consideration to be acquired by a Chinese firm.
My View: With all the back-and-forth controversy going on right now regarding trade, it's hard to believe we're talking about potentially suspending “Buy America" rules to allow a Canadian-domiciled company owned by a Chinese entity to build a bridge honoring an athlete who is a hero on both sides of the border. Honestly, if that were a movie plot it would be so far-fetched it might not even get made. I guess it shows that we're living in times where the old adage is truer than ever — you just can't make this stuff up.
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