US Nears Removal of Tariffs on Canada, Mexico Metals

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Trudeau said Canada would now work with the United States on the timing of USMCA ratification and said he was optimistic Canada would be "be able to move forward well in the coming weeks".

Trump says he'll decide whether to take further action in 180 days.

He cited Section 232 of the Trade Expansion Act of 1962, which empowers him to put a levy on products that the US Commerce Department determines to be a threat to national security.

"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". The car inquiry covered imports of vehicles including SUVs, vans and light trucks, as well as auto parts.

A group representing major German and Asian automakers including Daimler AG, Volkswagen AG, Honda Motor Co and Nissan Motor Co, called the suggestion some auto imports are a national security risk "absurd".

One year ago, Commerce Secretary Wilbur Ross said the tariffs on Canada, as well as Mexico, were necessary to prevent a flood of cheap Chinese steel into the USA through its NAFTA partner countries. Now, it appears the uncertainty hanging over the auto industry will continue to hover around for a couple more months.

Trump still is hoping to use the threat of auto tariffs to pressure Japan and the European Union into making concessions in ongoing trade talks.

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The agreement removes a sore point in relations and a major hurdle to the passage of a new pact to replace the North American Free Trade Agreement (NAFTA), which dates from 1994.

The auto tariffs face strong opposition in Congress, including from many prominent Republicans.

"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. The White House was demanding a cap on Canadian exports at little more than 2017 levels - a proposal rejected out of hand by the Liberals.

Trump's proclamation said "domestic conditions of competition must be improved by reducing imports" and said a strong USA auto sector is vital to US military superiority. Canada responded with dollar-for-dollar "countermeasures" on $16 billion worth of American imports.

The hostilities between the world's two biggest economies have weighed heavily the past couple of weeks on the USA stock market, threatening a long rally that Trump touted as a vindication of his economic policies.

US Commerce Secretary Wilbur Ross told President Trump that "successful negotiations could allow American-owned automobile producers to achieve long-term economic viability and increase R&D spending to develop cutting-edge technologies that are critical to the defense industry".

The Center for Automotive Research warned in a report past year that Trump's proposed tariffs would add up to $6,875 on average to the price of a vehicle and put hundreds of thousands of jobs in the sector at risk.

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