End of US tariffs on Canadian, Mexican steel, aluminum close: Mnuchin

Mnuchin being sworn in at the Oval Office.

“I think we are close to an understanding with Mexico and Canada,” Treasury Secretary Steven Mnuchin said May 15, as Foreign Affairs Minister Chrystia Freeland met with Trump trade czar Robert Lighthizer in a renewed push to get the tariffs lifted.

Mnuchin was testifying before the US Senate appropriations subcommittee where he was asked why those two countries continue to face a 25% duty on steel and 10% levy on aluminum exports to the United States.

Mnuchin said he has spoken to Finance Minister Bill Morneau and their Mexican counterpart about the tariffs, but that Lighthizer is actively leading discussions.

“My sense is that we’re making progress but there’s obviously more work to be done,” Morneau said.

Morneau said he raises the tariffs with Mnuchin every time they talk, including in a telephone call last week and face-to-face meetings last month in Washington at World Bank and G20 finance ministers’ meetings.

“I’m regularly putting forward the point of view that these tariffs are not only not helpful to the Canadian economy – to either the producers or buyers of steel – but they’re also damaging to the US economy,” said Morneau.

President Donald Trump imposed the tariffs during contentious continental trade talks by using a section of US law that allows the president to tax imports on national security grounds. The three countries’ negotiators ultimately reached a new deal that the Americans call the United States-Mexico-Canada Agreement.

Mnuchin acknowledged what business leaders in all three countries, as well as US lawmakers on both sides of the political divide, have been saying: that the tariffs must be lifted for the newly negotiated North American free trade deal to be ratified by legislators.

“I can assure you that Canada and Mexico are the priority,” Mnuchin said. “The president has instructed us to try to figure out a solution, and this is a very important part of passing USMCA, which is a very important economic agreement for two of our largest trading partners.”

Freeland had no new developments to report as she emerged in the morning from the headquarters of the United States Trade Representative. She said she had a “good meeting” with Lighthizer.

“And we made the case, as we have been doing for some time, that the best outcome for both Canadians and Americans would be to lift those tariffs and to have free trade between our two countries,” Freeland told reporters.

Freeland is scheduled to go to Capitol Hill for a meeting with the influential Republican chair of the Senate finance committee, Chuck Grassley, who expressed optimism earlier this week that the tariffs might soon be lifted.

Her visit comes after Trump and Prime Minister Justin Trudeau discussed the tariffs in a pair of telephone calls on consecutive days late last week.

Freeland, Trudeau and others in the Canadian government have derided the tariffs as absurd, illegal and insulting.

Lighthizer is also expected to meet House of Representatives Speaker Nancy Pelosi to discuss the Canada-Mexico tariffs and the broader US tariff war with China.

Pelosi and fellow Democrats in the House have raised concerns about ratifying the new trade deal because of concerns over labour rights in Mexico, among other things.

Freeland discussed workers’ rights in her meeting with Lighthizer, and filled him in on her talks on May 14 in Toronto with two visiting members of the new Mexican government, which is embarking on major labour reforms in order to meet its obligations under the new trade deal.

“We discussed ways Canada can support Mexico in this important effort, which is good for workers in Mexico, good for workers across North America,” she said. “Canada is a real supporter of union rights and we’re happy to be discussing that important issue with our Mexican colleagues.”