US Nears Removal of Tariffs on Canada, Mexico Metals

Andrew Cummings
May 18, 2019

Mr Trump directed US Trade Representative Robert Lighthizer to pursue negotiations and report back within 180 days and said if no deal is reached Trump will decide by then "whether and what further action needs to be taken".

The agreement will end the continental trade war that has raged for most of the previous year.

The United States has reached a deal to remove steel and aluminium tariffs on Canada and Mexico.

Trudeau offered a shout-out to Canadian unions for their support, and said it helped the government hold firm to US demands that it submit to quotas before lifting the tariffs.

Canada has also agreed to drop the tariffs it raised on goods imported from the retaliation.

Initially, Mexico, Canada, and the European Union were given exemptions to these tariffs, but those expired on June 1.

Canada and Mexico had demanded that the tariffs be removed before they would sign on to the renegotiated NAFTA trade deal, which Trump calls the USMCA, for US, Mexico and Canada Agreement. None of the three countries has yet ratified.

Carmakers, which have announced hundreds of millions of dollars in higher USA costs due to the tariffs, praised the deal and said it brought USMCA passage a big step closer. In the USA, meanwhile, congressional Democrats are still calling for changes to the deal before they will vote for it.

The agreement also outlines a process for reimposing the tariffs if one of the countries experiences a "surge" of imported steel or aluminum.

He urged Congress to approve a new trade pact between the three countries to replace. Jean Simard, president and CEO of the Canadian Aluminum Association, says the deal will put "an end to the harmful uncertainty that is impeding the development of the Canadian and North American aluminum industry".

The U.S. tariffs were a 25 per cent steel tariff and 10 per cent tariff on aluminum, while Canada's countermeasures amount up to $16.6 billion in imports of steel, aluminum, and other products from the Unites States, subjected to either a 25 or 10 per cent surtax. At the time, his administration said the measures were meant to pressure the two countries in NAFTA talks.

Canada retaliated with its own tariffs of 25 per cent on steel and 10 per cent on aluminum, but also imposed a 10 per cent tariff on multiple consumer items, targeting products such as Kentucky bourbon from states represented by US politicians who might push back against the tariffs.

The group said that since 2017 automakers have invested $22.8 billion in new and existing facilities in the United States, but "increased auto tariffs threaten to undo this economic progress".

The hostilities between the world's two biggest economies have weighed heavily the past couple of weeks on the USA stock market, threatening a long rally that Trump touted as a vindication of his economic policies.

Mexico's point-man on the file, Jesus Seade, told The Globe and Mail this week that his country initiated the most recent talks with the USA three weeks ago. The in talks with both trading partners, but autos are not now part of discussions with the EU.

U.S. President Donald Trump shake hands with Canada's Prime Minister Justin Trudeau.

That meeting ended without a deal, but the sources said the two sides have remained in touch to keep negotiating.

"We stayed strong", he said.

Other reports by iNewsToday