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Metales

US reaches agreement to remove Canada, Mexico metals tariffs

Metales | No férreos | Acero

Market Data - Metales

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US reaches agreement to remove Canada, Mexico metals tariffs

Pittsburgh — The US has reached an agreement to remove the Section 232 tariffs on steel and aluminum imports from Canada and Mexico, without imposing quotas to cap imports at a certain level, it was announced Friday.

The US has agreed to eliminate the tariffs on Canada and Mexico within 48 hours, with the countries also agreeing to drop retaliatory tariffs on US-made steel, according to a joint statement by issued by Canada and the US. The countries have also agreed to terminate all pending litigation with the World Trade Organization regarding the Section 232 tariffs.

Under the agreement, the countries will implement measures to prevent the importation of steel and aluminum that is unfairly subsidized or sold at dumped prices and prevent the transshipment of steel and aluminum between countries.

The countries will also establish an agreed-upon process for monitoring steel and aluminum trade between them.

"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, according to the joint statement. "In the event that imports of steel or aluminum products surge meaningfully beyond historic volumes of trade over a period of time, with consideration of market share, the importing country may request consultations with the exporting country."

Following consultations, the importing country may choose to impose duties of 25% for steel and 10% for aluminum with respect to the individual products where the surge took place, according to the statement. If action is taken by the importing country, the exporting country is able to retaliate only in the affected sector, according to the agreement.

US President Donald Trump and Canadian Prime Minister Justin Trudeau discussed the tariffs in a call Friday, according to a readout of the call provided by the prime minister's office.

Mexico and Canada received a temporary exemption from the Section 232 tariffs when they took effect March 23, 2018, but the US imposed the trade measures on Mexico, Canada and the EU in June 2018. The import tariffs of 25% on steel and 10% on aluminum have become a sticking point in ratifying an updated trade agreement between the US, Canada and Mexico, known as the US-Mexico-Canada Agreement (USMCA). The USMCA was signed by the leaders of the US, Canada and Mexico in October 2018 but must still gain approval from legislators in all three countries.

-- Justine Coyne, justine.coyne@spglobal.com

-- Edited by Tom Balcerek, newsdesk@spglobal.com

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