The United States struck deals on Friday to lift tariffs on steel and aluminum imports from Canada and Mexico, the three governments said, removing a major obstacle to legislative approval of a new North American trade pact.
The separate agreements, which will not impose US quotas on Canadian and Mexican metals shipments, will also eliminate Mexican and Canadian retaliatory tariffs on a broad range of US products, including pork, beef and bourbon.
The United States and Canada said their agreement will be implemented by Sunday afternoon, and includes new curbs aimed at preventing dumped steel and aluminum from China and other countries from entering the US market via Canada.
US President Donald Trump had imposed the global “Section 232” tariffs of 25% on steel and 10% on aluminum in March 2018 on national security grounds, invoking a 1962 Cold War-era trade law.
Both Canada and Mexico argued for 14 months that their metals industries posed no security threat as their economies are integrated with the United States, and challenged the tariffs before the World Trade Organization.
“This is just pure good news for Canadians,” Canadian Prime Minister Justin Trudeau told reporters after announcing the deal to workers at Stelco Holdings Inc’s steel mill in Hamilton, Ontario.
Stelco shares soared 11% on the news, while top US steelmaker Nucor fell 3.1% and US Steel Corp, which had seen massive profit improvement because of the tariffs, fell 1.2%.
Trump, speaking to realtors in Washington, called the pact “a fantastic deal for our country” and said Congress would hopefully approve the USMCA quickly. “Then the great farmers and manufacturers and steel plants will make our economy even more successful than it already is.”
Jesus Seade, Mexico’s deputy foreign minister for North America, said the deal “measurably increases the probability” the USMCA will be approved before the US Congress’ summer break in August. Some
US lawmakers say passage would become more difficult after the recess due to budget battles expected in the fall and increased 2020 presidential campaign activity.