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United States Reaches Deal to Lift Metal Tariffs on Canada and Mexico

WASHINGTON — The Trump administration reached an agreement with Canada and Mexico to lift tariffs on metal imports, resolving a yearlong standoff that inflamed North Atlantic tensions and complicated efforts to ratify a revised trade deal.

“I’m pleased to announce we’ve just reached agreement with Canada and Mexico,” President Trump said on Friday. “We’ll be selling our product into those countries without the imposition of tariffs.”

As part of the agreement, both Mexico and Canada agreed to lift retaliatory tariffs on American products. Instead of tariffs, the nations would set up a system for monitoring and enforcement in case of import surges into the United States.

In a statement on Friday afternoon, the United States trade representative said that the metal tariffs would be removed and that both Mexico and Canada “had agreed on the removal of all retaliatory tariffs imposed on American goods by those countries.”

The Mexican government also said that it had reached an agreement with the United States to lift the steel and aluminum tariffs. In a statement issued by the office of President Andrés Manuel López Obrador, the government said that there would be no quotas.

“Tariff-free trade will be restored in these products,” the statement said.

For its part, Mexico said that it would lift the retaliatory tariffs that it had imposed. Both countries agreed to take measures to avoid dumping and to establish a process to monitor steel and aluminum trade between the two countries.

“Mexico reached a highly satisfying agreement with the United States,” the statement said.

Speaking from Stelco, one of the two major producers in Canada’s steel-making epicenter of Hamilton, Ontario, Prime Minister Justin Trudeau of Canada said on Friday that the deal was “pure good news.”

Mr. Trudeau, appearing jubilant, signaled that the lifting of the tariffs could help clear the way for the ratification of the United States-Mexico-Canada Agreement reached late last year. “We are very optimistic we will be able to move forward in coming weeks,” he said, adding the deal was “a huge step forward.”

The prime minister said that the deal stemmed from steady conversations with the United States, including Mr. Trump, and that both sides agreed that the tariffs were “harming workers and consumers on both sides of the border.”

In recent weeks, the pressure on Mr. Trump to reach an accord with Canada and Mexico began to outweigh his affection for the tariffs.

According to a congressional aide who has been involved in the talks among the three countries, the White House was growing increasingly sensitive to pressure from Republicans in rural states, whose farmers have been suffering from retaliation that diminished their access to sell in neighboring markets. Their problems were compounded when talks with China broke down this month, this person said, and ultimately Mr. Trump decided that he needed a victory on trade.

The decision to ease the 25 percent tariffs on steel and 10 percent tariffs on aluminum came as the White House also announced a six-month delay in determining whether to impose levies on foreign automobiles. That extension delivers a temporary reprieve to global automakers and auto suppliers, which had been bracing for punishing tariffs of up to 25 percent. But it sets up a tight deadline for the president and his advisers to reach trade deals with Japan, Europe and potentially other countries.

Farmers, ranchers and business groups had been pushing to lift the metal tariffs, to encourage Canada and Mexico to remove the tariffs they have placed on American products in return. Canadian and Mexican levies on products like pork, cheese and milk have especially hurt American farmers who are already smarting from Mr. Trump’s trade conflicts with China and Europe.

The agreement is likely to help the administration focus on the other trade fights it is waging, most notably fractious negotiations with China, which nearly collapsed last week. And it will remove one obstacle to the passage of the new United States-Mexico-Canada Agreement in Congress.

The United States, Canada and Mexico signed that trade deal, the successor to the North American Free Trade Agreement, in November. The pact still needs to be ratified by legislatures in all three countries.

American lawmakers of both parties, as well as Canada and Mexico, had insisted that tariffs on steel and aluminum must be lifted before votes would be held. Lawmakers have argued that the tariffs, while aimed at other countries, hurt American companies and consumers by raising prices for products that use imported steel and aluminum.

Even with an agreement to resolve metal tariffs, the North American pact still faces potential opposition from congressional Democrats. They have criticized its labor and environmental protections as insufficiently weak, and said that its protections for drug companies may undermine their efforts to make health care more affordable.

Canada, like Mexico, has repeatedly said it would not ratify the new North American Free Trade Agreement, which Mr. Trump considers one of his signature economic achievements, unless the metal tariffs were lifted. Canada has argued that the tariffs undermined both countries’ economies and were particularly counterproductive given the United States-Mexico-Canada Agreement reached last year.

“Certainly, for the ratification of the U.S.M.C.A., it’s a step forward,” said Patrick Leblond, a senior fellow at the Center for International Governance Innovation, a think tank.

In its announcement on Friday, Canada said that the two countries would set up measures to block imports of metals that are unfairly subsidized or sold at below-market prices. In the event of a surge in imported products, the countries would carry out consultations, and if those were not successful, the governments could impose a tariff on the individual product of 25 percent for steel and 10 percent for aluminum, it said.

After Mr. Trump imposed the metals tariffs last June, the move drew anger, bemusement and disappointment in the metals industry and across the political spectrum in Canada. Canadians were irate that Mr. Trump appeared intent on punishing Canada, a major trading partner and traditionally one of its most ardent allies. Backed by all three of Canada’s three major political parties, the Canadian government retaliated with import duties on $12.6 billion of American products, including ballpoint pens and industrial pipes.

The White House’s justification of the tariffs by citing national security drew particular scorn in Canada, where many were already reeling from Mr. Trump’s bullying and mocking of Mr. Trudeau and his trade policies. Some called for boycotts of American products and avoiding taking vacations in the United States.

The American tariffs were particularly punishing to Canada because it buys more American steel than any other country, according to the Canadian government, while nearly 90 percent of Canadian steel and aluminum exports go to the United States. In 2017, the Canadian steel industry employed more than 23,000 Canadians and the aluminum industry about 10,500 workers. After the imposition of the duties, some economists predicted it could cost the Canadian economy more than $3 billion Canadian dollars annually.

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