When It Comes To Trade, What Is Fair?

Kathy and I have raised three children and now delight in our two grandchildren. As any parent or grandparent knows, the word “fair” is deployed a lot when little ones — or teenagers — feel their rights or autonomy have been challenged. When navigating these skirmishes, it is not always easy for the adults in the room to determine, precisely, what is fair.

So too with international trade.

Policy questions about global balance are difficult, but the Metals Service Center Institute (MSCI) has approached these debates with several principles in mind. As the United States imposes new penalties on global trading partners — including neighbors like Canada and Mexico — we hold fast to those principles. MSCI’s team also is working hard to keep its member companies abreast of all the latest developments and what they mean for the North American industrial metals sector.

What Is MSCI’s Position On Trade And Tariffs?

The MSCI is a North American trade association. It represents companies headquartered in the United States, in Canada, and in Mexico and with operations throughout the world. Free and fair trade is essential for MSCI member companies to expand, innovate, and serve their customers.

While understanding the importance of free and fair trade, the MSCI also recognizes not every country in the world is committed to a rules-based system. Communist governments like China subsidize their own industries, ship goods through countries with weak regulations, and exploit labor and the environment in order to gain competitive advantage. Simply stated, these policies are mercantilism in the truest sense.

When trading partners act in such a manner, it is only right to push back.

In fact, pushing back is the only way to ensure a vibrant and healthy North American source of supply and a vibrant and healthy North American source of demand for products. (Both goals are equally important to the MSCI, which represents companies along the entire industrial metals supply chain.)

That is why, in 2017, when the first Trump administration contemplated Section 232 tariffs on steel and aluminum imports, the MSCI argued global overcapacity and other unfair trading practices, particularly by China, harm the U.S. steel and aluminum industry and our downstream markets. We advised federal officials to provide relief for producers up and down the supply chain and to consider the consequences of any new trade policy, including: the economic impact of global overcapacity on the entire domestic metals supply chain; transition times and implementation rules to any new policy; availability of domestic metals to meet U.S. national security needs, as well as general industrial and consumer demand; and trade flows under current free trade agreements.

The MSCI asked the Trump administration to exclude Canada and Mexico from any trade penalties, but to address circumvention by non-market economies bringing products into the United States through its northern and southern borders as well.

The MSCI reiterated this position this past March when President Donald Trump reimposed the Section 232 tariffs on nations that had won exemptions, including Canada and Mexico. “We feel Canada and Mexico should ultimately be exempt from the tariffs, assuming free and fair trade is established between the countries,” the MSCI’s statement said. “Ultimately, North American trading partners should work collaboratively to address unfair trading practices by countries with nonmarket economies without imposing costly penalties on one another.”

In general, the MSCI evaluates trade policies by asking whether they:

• Open new markets to North American products;
• Enforce and strengthen current laws and agreements that are meant to prevent and combat unfair trade practices, including currency manipulation; and
• Address unfair trade practices through legal action when necessary.

The MSCI will continue to hold fast to these principles as the United States, Canada, Mexico, and their global trading partners make decisions about the policies they believe are best for their citizens, businesses, and economies.

The institute also will continue to help its members anticipate and interpret the implications these policies will have for the industrial metals supply chain.

What MSCI Tools Help Members Stay On Top Of Trade, Tariff Policies?

Depending on who you ask, President Trump’s trade and tariff policies either protect U.S. workers, businesses, and national security or they have resulted in stock market instability, consumer anxiety, and a shrinking U.S. economy for the first quarter of 2025.

These penalties, and trading partners’ reactions to them, will continue to dominate many aspects of the North American macroeconomy — inflation, growth, consumer expectations, business confidence, and corporate market value performance — and the global economy over the coming months and even years. That is why the MSCI has added a new “Tariff Tracker” to its Macroeconomic Current publication.

The Tariff Tracker includes a new measure called the “Tariff 25.” It is a set of 25 Consumer Price Index categories economists believe are highly exposed to tariffs, including new motor vehicles, household durables like appliances, apparel, shoes, other household goods, and food products that are heavily imported, like seafood. Learn more about the Tariff Tracker at this link. Learn more about Macroeconomic Current at this link.

Each quarter, the MSCI welcomes an economist for a free webinar exclusively for members. Members can join us on June 5 when Dr. Robert Wescott and Jeff Jensen will offer:

• The latest on trade and tariffs;
• A drill-down on hard versus soft data in the economy and what the recent divergence could suggest about where things are headed;
• A discussion of soft power and whether the United States can continue to attract foreign direct investment from other countries; and
• Opportunities and challenges related to reshoring manufacturing.

Register at this link.

I also encourage member company employees to check out our recent webinar with Morgan Stanley’s Steven Ploder that also explored the effects of U.S. tariffs on the industrial metals industry and on the economy in general. (As a reminder, you can find all MSCI’s past webinars on the economy and trade — or any topic — along with certain sessions from our national conferences in our Webinar Library.)

As the world saw last Friday when President Trump made another announcement regarding the Section 232 tariffs, the policy environment is shifting quickly. To keep on top of the latest news, please read Connecting the Dots each week. The MSCI team also is working to finalize our agendas for the 2025 Economic Summit and for the 2025 Aluminum Conference. Both events will include discussions on trade and tariff policy. Save the date for the Economic Summit by clicking this link. Save the date for the Aluminum Conference by clicking this link.

In 1937, President Franklin Roosevelt reminded Americans, “Goods produced under conditions which do not meet a rudimentary standard to decency should be regarded as contraband and not allowed to pollute the channels of international commerce.”

As nations committed to both free and fair trade attempt to push back against bad international actors, those words offer wisdom to remember.