President Donald Trump on Friday announced a deal to lift US tariffs on steel and aluminum imports from Canada and Mexico that had created friction between the neighbors and blocked a new North American free trade agreement.
Trump also announced a six-month delay in imposing steep tariffs on auto imports, seeking to pressure Europe and Japan into bargaining table concessions on trade.
“I’m pleased to announce that we’ve just reached an agreement with Canada and Mexico and will be selling our product into those countries, without the imposition of tariffs,” Trump said at an event in the US capital.
His statement came moments after Canada released the text of the agreement between Ottawa and Washington in which they agreed to eliminate US tariffs on steel and aluminum, and Canada’s retaliatory measures, within no more than two days.
Mexico confirmed it had reached a similar agreement with the United States.
The decision to delay auto tariffs marked a temporary reprieve from what would have been a sizable escalation in Trump’s multi-front trade wars.
Trump’s threat targets a major chunk of global economic activity with profound disruptions. Hundreds of billions of dollars in autos are manufactured, shipped and sold internationally every year.
In a proclamation, the president directed US Trade Representative Robert Lighthizer to update him within 180 days on the outcome of negotiations with the EU, Japan and “any other country” Lighthizer deems appropriate.
Trump’s decision also preserved a truce declared last year with European Commission President Jean-Claude Juncker in which both sides agreed to cease trade hostilities while efforts continued to resolve the trade dispute.
The steep US tariffs imposed on Canada and mexico last year – 25 percent on steel and 10 percent on aluminum — became a major stumbling block to ratifying a new North American trade pact negotiated last year by the three countries.
Canada and Mexico initially were exempted from the tariffs Trump enforced using a national security argument, as part of his hardline trade tactics.
Once America’s neighbors were included, the levies drew retaliation with tariffs on a host of US products.
Even after the governments agreed to a revised free trade deal – the US-Mexico-Canada Agreement, or USMCA – the tariffs remained in place, but officials in Ottawa and Mexico City said they would not sign unless Washington removed the metals duties.
US tariffs on steel and aluminum from Europe remain in place, as does the EU retaliation. Some countries, including South Korea, accepted export quotas to avoid the tariffs.
