Mnuchin sees progress on steel tariffs with Mexico, Canada

Cheryl Sanders
May 18, 2019

Canada, Mexico and some USA lawmakers see lifting the tariffs imposed last year as imperative for ratifying USMCA, which would replace the 25-year-old North American Free Trade Agreement.

The reason Canada is being included at this stage is to avoid a repeat of NAFTA talks when Mexico reached a deal with the U.S. and Canada wasn't included.

Progress being made between Washington and Mexico City toward repealing US tariffs on steel means it is not the right time for Mexico to target new USA products in retaliation for the duties, a senior Mexican official said on Wednesday.

"It was a good meeting", she told reporters, confirming that the officials discussed the steel and aluminum levies, as well as other elements of the USMCA.

Canada's Foreign Affairs Minister Chrystia Freeland is now in Washington, D.C., and discussed the tariffs with U.S. Trade Representative Robert Lighthizer this morning.

"I think we are close to an understanding with Mexico and Canada", on resolving the tariffs, Mnuchin said at a U.S. Senate Appropriations subcommittee hearing. However, he did not provide any details.

Following her meeting with Mr Lighthizer, she repeated the demand that the tariffs - 25 per cent on steel and 10 per cent on aluminum - be withdrawn before the implementing the revised deal known as the US-Mexico-Canada Agreement.

Freeland discussed workers' rights in her meeting with Lighthizer, and filled him in on her talks on Tuesday in Toronto with two visiting members of the new Mexican government, which is embarking on major labour reforms to meet its obligations under the new trade deal. None of the three countries' legislatures have ratified USMCA. It will not reconvene until December.

Lighthizer later met with U.S. House of Representatives Speaker Nancy Pelosi to discuss the path forward on a potential USMCA vote.

With US Trade Representative Robert Lighthizer, Mnuchin has led the US delegation in 11 rounds of shuttle diplomacy aimed at resolving the US-China trade war.

Mexico and Canada imposed tariffs against a range of US products in retaliation for Trump's metals duties to put pressure on Washington to repeal them.

"I have optimism if we do things well, the Americans may come along", said Seade.

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