The United States and Canada have reached a deal to remove tariffs on steel and aluminum, ending a costly battle and removing a hurdle to the adoption of the United States-Mexico-Canada trade agreement.
Both governments agreed to lift the tariffs of 25 percent on steel and 10 percent on steel by May 19, in a joint statement released on May 17. The U.S. and Canada also will drop all existing litigation with the World Trade Organization related to the metals dispute, and establish a system for monitoring the metals trade between the countries.
The deal, however, leaves open the possibility of the resumption of tariffs. Both Canada and the U.S. reserve the right to re-impose duties on steel and aluminum in response to surges in imports “beyond historic volumes of trade.” The tariffs, and any retaliatory countermeasures are to be confined to the affected product, according to the governments’ joint statement.
“These tariffs were harming consumers on both sides of the border,” said Prime Minister Justin Trudeau during a visit to Stelco, a steel company in Ontario, after the agreement was announced.
Trudeau said the agreement opened the door for ratification of the successor of NAFTA, the United-States-Mexico-Canada-Trade Agreement.
“Ahead of the new NAFTA, it did make sense to continue tariffs on steel and aluminum,” he said.
The agreement followed talks in Washington between U.S. Trade Representative Bob Lighthizer and Canada’s Chrystia Freeland.
The administration of President Donald Trump implemented tariffs on Canadian steel and aluminum in 2018. Canada responded in kind with its own tariffs on U.S. steel, aluminum and other products.
The tariffs have hit hard on both sides of the border and disrupted closely integrated economies and supply chains. In the cities of Detroit and Windsor, parts were known to cross the border multiple times during the assembly of vehicles.