In the efforts of encourage the lawmakers of Mexico and Canada to quickly ratify the new North American trade deal, the U.S. will lift steel and aluminum tariffs on the two trade partners, said the United States President Donald Trump.

“I’m pleased to announce that we’ve just reached an agreement with Canada and Mexico and will be selling our product into those countries without the imposition of tariffs or major tariffs,” Trump said at an event Friday. “Hopefully Congress will approve the USMCA quickly.”

In reciprocation of the US move, Canada is also set to lift all of the retaliatory tariffs that it had imposed on imported US goods and which would take effect within the next two days. Trump’s removal of the duties was welcomed in a twitter post by Mexican Deputy Foreign Minister Jesus Seade. Both the countries said that this move would pave the way for ratification of the approving of the new trade pact by lawmaker sin both the countries.

This measure by the Trump administration would effectively remove import duties of 25 per cent and 10 per cent on steel and aluminum respectively that were imposed by the US about a year ago citing arguing that such imports threatened the national security of the country. That had prompted Mexico and Canada to impose tit-for-tat duties on U.S. farming goods and other products imported into the countries. This also became an impediment for Mexico and Canada ratifying the newly hashed NAFTA agreement by their respective parliaments.

However, under the tariff lifting agreement between the three countries, US reserves the right to re-impose the tariffs on steel and aluminum if it deems that the two trading partners are not doing much top stop export of the metals into the US over the average historical levels. Efforts to find out the origin of the metals being exported into the US has also been agreed upon by the three countries which is aimed at preventing steel makers from other countries to avoid the metal tariffs by exporting the metals through Canada or Mexico.

The three countries would also set up an enforcement system that would be tasked with ensuring that primary steel and aluminum producers of the three countries are given the primary advantage of the agreement and that there is regional melting, pouring or smelting of the metals.

The metal tariffs and retaliatory have been an impediment to the US Congress ratifying the new North American trade while it has also prevented law makers in Canada and Mexico to ratify the deal in their countries. The urgency of approving USMCA has been emphasized by US Republican senators, led by Finance Committee Chairman Chuck Grassley of Iowa. They have also stressed on the importance of removing existing tariffs and not imposing new ones.

Canadian Prime Minister Justin Trudeau said at a steel plant in Hamilton, Ontario, that the “tariffs on steel and aluminum and our counter measures represented significant barriers to moving forward with the new Nafta agreement.”

“This move, coupled with the lifting of retaliatory duties, will bring immediate relief to American farmers and manufacturers,” said Tom Donohue, president of the U.S. Chamber of Commerce. “This action delivers a welcome burst of momentum for the USMCA in Congress, and we urge the administration and Congress to continue their efforts to chart a path toward its approval as soon as possible.”

(Adapted from Bloomberg.com)

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