Economy & Trade

Canada, Mexico lift tariffs on US goods after Trump scraps steel, aluminum levies

Canada and Mexico on Monday lifted tariffs on a slew of U.S. goods, including steel, aluminum, whiskey and beef as the three countries push for ratification of an updated trade agreement.

The moves by Canada and Mexico come three days after President Trump struck a deal to exempt both trading partners from U.S. tariffs on steel and aluminum imports.

Trump imposed tariffs of 25 percent on imported steel and 10 percent on imported aluminum in March 2018 and ended an exemption for Canada, Mexico and several others two months later.  ADVERTISEMENT

Canada and Mexico were among several countries to impose tariffs on U.S. steel and aluminum last June in retaliation, also targeting American orange juice, whiskey and beef.

Trump imposed the tariffs in part to create leverage over Canada and Mexico as the three nations renegotiated the North American Free Trade Agreement (NAFTA). Both countries insisted that the steel and aluminum tariffs be lifted before ratifying the new version of NAFTA that was finalized in October.

The new deal, called the U.S.-Mexico-Canada Agreement (USMCA), requires the approval of legislatures in all three countries before it can go into effect.

"With these developments, Canadian and American businesses can now get back to what they do best: working together constructively and supporting good, well-paying middle class jobs on both sides of the border,” said Canadian Finance Minister Bill Moreneau in a statement. “The removal of tariffs and countermeasures is a true win-win for everyone involved, and great news for Canadian and American workers, for our communities, and our economies."

Trump’s deals with Mexico and Canada help eliminate one obstacle to getting the USMCA approved by Congress.

Sen. Chuck Grassley (R-Iowa), chairman of the Senate Finance Committee, pledged to block a vote to ratify the USMCA unless Trump lifted tariffs on Canadian and Mexican steel and aluminum.

But the president still faces long odds in getting the USMCA through the House, where Democrats are largely opposed to the deal.

Top Democratic lawmakers, including Speaker Nancy Pelosi (Calif.), say the USMCA must include tighter labor and environmental standards to win support from the party.


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