The trade dispute between the U.S., Mexico and Canada over aluminum and steel tariffs is set to end as the three countries agreed May 17 to drop duties within two days.
The U.S. and Canada issued a joint statement saying they would cut tariffs that stemmed from a U.S. investigation under Section 232 into the national security implications of steel and aluminum imports. A similar deal with Mexico was confirmed in a statement by the Office of U.S. Trade Representative.
After the Section 232 investigation, the U.S. slapped 25% and 10% duties on Canadian steel and aluminum, respectively, while Canada, a major source of U.S. steel and aluminum, reciprocated with duties on a slew of U.S. products.
The two countries also agreed May 17 to end pending litigation over the Section 232 tariffs at the World Trade Organization. The U.S. and Canada plan to work to "implement effective measures" to prevent imports of aluminum or steel that are unfairly subsidized or transshipped, where a metal product passes through Canada or the U.S. but was mainly produced in another country.
"The United States and Canada will establish an agreed-upon process for monitoring aluminum and steel trade between them," the statement said. "In monitoring for surges, either country may treat products made with steel that is melted and poured in North America separately from products that are not."
The agreement also stipulates that Canada and the U.S. can request consultation should aluminum and steel imports surge over "historic volumes." In the event, the agreement states either country can impose 25% and 10% duties on steel and aluminum, respectively. Retaliatory measures, should they come, must only hit back at the same sector.
Prime Minister Justin Trudeau held a May 17 press briefing in Hamilton, Canada, about the agreement. He said Canada and the U.S. recognized the tariffs did not make sense and held many conversations in recent weeks to negotiate the end to the tariffs.
"There was no breakthrough moment," Trudeau said. He said Canada, the U.S. and Mexico committed to assess global steel markets to protect workers in North America and "safeguard our industry here."
The American Petroleum Institute, which represents the natural gas and oil industry in the U.S., issued a statement saying it applauded the move not to replace the tariffs with quotas.