WASHINGTON — U.S. trade negotiators and their Canadian and Mexican counterparts on May 17 announced an agreement under which the United States will lift its 25% tariffs on steel and 10% tariffs on aluminum imported from Canada and Mexico. In exchange, Canada and Mexico agreed to ensure no Chinese steel is shipped (trans-shipped) to the United States through their countries.  Additionally, Canada and Mexico agreed to lift tariffs they placed on certain U.S. agricultural and other products that were imposed in retaliation for the U.S. tariffs on their steel and aluminum.

Lifting the tariffs by all parties was viewed as essential to efforts to secure approval of the U.S.-Mexico-Canada Agreement (U.S.M.C.A.) by the parliaments of the three countries. 

The Trump administration in March 2018 imposed tariffs on all imported steel and aluminum under Section 232 of the Trade Expansion Act of 1962. Section 232 allows the president to impose tariffs in the event his administration concludes imports of the products in question are detrimental to the national security interests of the United States.

The steel and aluminum tariffs were levied against all countries of origin, but individual nations such as Argentina, Australia, Brazil and South Korea were exempted after coming to agreement with the United States on voluntary measures to limit such exports.

Canada and Mexico were not exempted from the tariffs, which became a bone of contention during the difficult and often acrimonious negotiations of the U.S.M.C.A. That agreement, which, if adopted by all three nations, will supplant the North American Free Trade Agreement.

Secretary of Agriculture Sonny Perdue applauded the agreement.

“Today’s announcement is a big win for American agriculture and the economy as a whole,” he said. “I thank President Trump for negotiating a great deal and for negotiating the removal of these tariffs. Canada and Mexico are two of our top three trading partners, and it is my expectation that they will immediately pull back their retaliatory tariffs against our agricultural products. Congress should move swiftly to ratify the U.S.M.C.A. so American farmers can begin to benefit from the agreement.”

Randy Gordon, president and chief executive officer, National Grain and Feed Association, said, “This is an extremely important development that should spur expeditious ratification of the U.S.M.C.A. trade accord in all three countries. As an organization that is a strong and unconditional supporter of U.S.M.C.A., we urge the administration to submit, and Congress to approve, U.S.M.C.A. on a bipartisan basis. In the current trade environment, in particular, U.S. agriculture desperately needs the certainty and market access U.S.M.C.A. will provide.”