The Trump administration is close to a deal with Mexico and Canada to address steel and aluminum tariffs, Treasury Secretary Steven Mnuchin said Wednesday.
A deal to lift the tariffs would boost the odds for congressional passage of President Trump’s U.S.-Mexico-Canada Agreement on trade, which has been stalled in part because lawmakers have said they won’t vote for it until the tariffs are removed.
“I think we are close to an understanding with Mexico and Canada. I’ve spoken to the finance ministers,” Mnuchin told the Senate Appropriations Committee, calling resolving the tariff issue a”priority of ours.”
CNBC reported Wednesday that the U.S. Trade Representative Robert Lighthizer would “offer a process” for removing the tariffs in a meeting Wednesday with Canadian Foreign Minister Chrystia Freeland, citing a senior administration source. A spokesperson for U.S. Trade Representative’s Office could not be reached for comment.
Mexican Economic Minister Graciela Marquez told reporters in Toronto on Tuesday that they were “close” to a deal. “We’re having very fruitful conversations on lifting the tariffs not only in the U.S. but also here in Toronto,” Marquez said following a meeting with Freeland.
To vote for the U.S.-Mexico-Canada Agreement, which would replace the 1993 North American Free Trade Agreement, several members of Congress are demanding that the U.S. restore exemptions to the 25% tariff on steel and 10% tariff on aluminum that Canada and Mexico previously enjoyed.
The exemptions were initially granted when the tariffs were enacted last year, but removed by the White House during the negotiations on the deal as a tactic to pressure Canada and Mexico. It was widely assumed by lawmakers and the business community that the exemptions would be restored once a deal was reached between the three countries, but the Trump administration has refused to restore them.
“If these tariffs aren’t lifted, USMCA is dead,” Senate Finance Committee Chairman Chuck Grassley, R-Iowa, said in a Wall Street Journal op-ed late last month. “There is no appetite in Congress to debate USMCA with these tariffs in place.”
Even if the steel and aluminum tariffs are removed, the trade agreement faces other challenges in Congress. House Speaker Nancy Pelosi, D-Calif., has yet to schedule a vote and has said the U.S. should reopen negotiations on the deal in order to firm up its enforcement provisions, a move that the U.S., Canada, and Mexico all oppose.
