The U.S. wanted Canada to agree to a "hard cap" on aluminum and steel exports, sources familiar with the matter told Reuters on Oct. 11, further dampening Canada's hope that tariffs on metal exports will be lifted.
One of the sources said that during their talks on the new trade deal with Mexico, U.S. officials told Canada they wanted an arrangement similar to the pact the U.S. signed with South Korea in March, in which Seoul agreed to cut exports by 30% of the previous three years' average in exchange for lifting the steel tariffs.
Canada refused to agree to the demand and stressed that any cap on the metals would have to be at a level higher than current exports to allow for expanded shipments, according to Reuters. One of the sources said the "government's position was that they would rather fight this in court than accept a hard cap." Two other sources said the arrangement would have caused investment in the aluminum industry to fall significantly.
The U.S. administration imposed the metal tariffs on Canada and Mexico in June on national security grounds. The measures remained in place despite the revamped trade agreement between the U.S., Canada and Mexico. Canada is the single largest supplier of aluminum and steel to the U.S., Reuters noted.