US agrees to lift steel and aluminum tariffs on Canada, Mexico

The Trump administration has agreed to remove aluminum and steel tariffs for Canada and Mexico as part of the trade agreement between the three nations.

What tariffs?

In March 2018, the Trump administration imposed a 10 percent tariff on all imports of steel to the United States and a 25 percent tariff on all imports of aluminum.

Initially, Mexico, Canada, and the European Union were given exemptions to these tariffs, but those expired on June 1.

In 2017, Canada was the largest exporter of both steel and aluminum to the United States.

President Donald Trump enacted these tariffs without Congress, claiming that the tariffs were in the best interest of national security. After he announced the tariffs, more than 100 Republican members of Congress signed a letter criticizing the move.

While these tariffs were praised by the steel and aluminum industries, they were shown to cause an increase in the cost of products that used these raw materials, including farming equipment.

In late November, Trump signed a trade deal with Canadian Prime Minister Justin Trudeau and former Mexican President Enrique Peña Nieto. This agreement still needs to pass Congress before it becomes law.

In an April 28 opinion piece, Sen. Chuck Grassley (R-Iowa) warned Trump that he needed to lift the steel and aluminum tariffs if he wanted the new U.S.-Mexico-Canada Agreement trade deal to survive. Grassley criticized the tariffs as a strategy, since they are paid by American importers and not the exporting countries.

What happened now?

On Friday, the Trump administration revealed that it planned to lift the tariffs on Mexico and Canada in the next 48 hours.

"I'm pleased to announce that we've just reached an agreement with Canada and Mexico, and we'll be selling our products into those countries without the imposition of tariffs, or major tariffs," Trump announced. He also stressed that he hopes "Congress will pass the USMCA quickly."

This announcement comes after Trump talked by phone with Trudeau about both the USMCA trade deal and the tariffs.