WASHINGTON—The U.S. and Canada have agreed to eliminate their tariffs on each other’s steel and aluminum and all related retaliatory tariffs, removing a major source of friction between the two countries and a key obstacle to the ratification of the new NAFTA.The tariffs will be dropped within two days, according to a joint Canada-U.S. statement issued by the Canadian government on Friday afternoon.U.S. President Donald Trump’s administration had insisted for months that the tariffs on Canada would not be lifted without a deal to impose quotas in their place. But Prime Minisiter Justin Trudeau objected, and this deal does not include quotas.Instead, the two countries agreed to “prevent the importation of steel and aluminum that is unfairly subsidized and/or sold at dumped prices,” “prevent the transshipment of steel and aluminum made outside of Canada or the United States to the other country,” and to create a system for monitoring “surges” in trade of steel and aluminum products.If imports of a particular product have surged “meaningfully beyond historic volumes of trade over a period of time,” either country can request a consultation with the other, then impose tariffs on that individual product. The other country can only impose retaliatory tariffs on other products in the same industry.The dispute began in 2018, when Trump controversially used a “national security” provision of U.S. trade law to impose a 25 per cent tariff on steel and 10 per cent tariff on aluminum from Canada, Mexico and other countries. Trudeau responded with equivalent tariffs on U.S. steel and aluminum, plus dozens of unrelated products produced in parts of the country critical to Trump’s political coalition.Trump had faced pressure to rescind the tariffs from Canada, his party and his voters. Trudeau’s government had warned Trump that Parliament would not hold a vote to approve the new NAFTA, one ...
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