US to halve tariffs on Canada steel, aluminum in trade deal

The tentative trade deal between the US and Canada would lower tariffs on certain Canadian exports of steel and aluminum to 25%, according to people familiar with the matter.

The details have yet to be finalized and are not expected to apply across the board. Different rates could apply to some derivative products that include those metals, said some of the people, who requested anonymity to discuss terms of the agreement before it is announced.

Talks between US and Canadian trade advisers continued Wednesday, less than 24 hours after US President Donald Trump paused planned 50% levies on billions of dollars of Canadian goods to allow more time to negotiate. The planned changes to the metals tariffs could help unlock a lasting deal to avert the broader duties before a Friday deadline.

Trump in the past has demanded changes to trade agreements or spiked them entirely at the last minute.

“We’re looking at that,” Trump said Wednesday when asked if he would reduce tariffs on Canadian metals. “We may bring some of the tariffs down to a level where other countries are because Canada was paying a higher tariff.”

The move under discussion would generally halve US tariffs on imports of the two metals, which currently face a 50% rate. The countries are also discussing exclusions and other measures that would change the scope of the levies, some of the people said.

The full terms of the broader deal under discussion remained unclear as of Wednesday afternoon.

The White House, the office of the US Trade Representative and office of the Canadian Prime Minister Mark Carney did not immediately respond to requests for comment.

Shares of Canadian steel producer Algoma Steel Group Inc. extended an earlier gain to as much as 24% in Toronto, its biggest-ever intraday rally. In the US, steel product maker Nucor Corp. dropped 8.9% and Century Aluminum Co. fell 11%.

On Wednesday, Trump nodded to US concessions in the ongoing talks. “Got to give something, and we’re doing certain things. We’re paying a high number. We’re reducing it a little bit,” Trump told reporters, without elaborating. “It’s good for everybody, but our farmers are going to be thrilled. Our manufacturers are going to be thrilled.”

Trump announced late Tuesday that he would pause implementation of the tariffs on Canadian goods for three days after the two sides signaled progress toward an agreement on tariffs. The two close allies, which did roughly $900 billion in trade in goods and services last year, have seen their relationship come under deep strain as Trump has ratcheted up trade pressure on Canada during his second term.

Last year, Trump imposed tariffs on imported steel and aluminum under Section 232 of the Trade Expansion Act as he erected his tariff wall around the US economy. The duties irked many close US trading partners and several negotiated deals with the administration to cap sectoral tariffs in exchange for making trade concessions.

Canada had focused its efforts on lowering the steel tariff, in particular, as well as the duties on automobiles. Canada is the top source of US aluminum imports, though the US has no capacity to meet its own demand and those tariff costs have been largely passed on in entirety to American buyers.

However, even as they work to fine tune the details, Trump administration officials are under pressure to avoid applying a reduced rate uniformly across steel and aluminum imports from Canada, some people familiar with the discussions said.

The Coalition for a Prosperous America, a manufacturing advocacy group that has supported tariffs, and other stakeholders have lobbied the Trump administration to combine any aluminum tariff reduction with so-called traceability requirements meant to better protect US fabrication that makes up the bulk of the domestic aluminum industry.

At risk, they warn, are some 125,000 jobs in the US tied to aluminum rolling, drawing and extruding.

Imported Canadian supplies currently make up about half of US aluminum consumption.

source:https://www.mining.com/web/us-to-halve-tariffs-on-canada-steel-aluminum-in-trade-deal/