The United States has reached a deal to remove steel and aluminium tariffs on Canada and Mexico. Under the terms of that agreement, both countries will also scrap retaliatory tariffs they imposed on US products.
In a joint statement on Friday, officials from the US and Canada said they have agreed to eliminate the tariffs within 48 hours.
Sources in the US and Canada told the Associated Press news agency that the Trump administration also has reached a deal to remove such tariffs from Mexico.
The agreement removes a sore point in relations and a major hurdle to the passage of a new pact to replace the North American Free Trade Agreement (NAFTA), which dates from 1994.
Efforts to have the metals tariffs lifted have been tied to ratification of the United States-Mexico-Canada Agreement (USMCA), which was designed to replace the 25-year-old NAFTA and which was signed by the three countries’ leaders on November 30.
The legislatures in the US, Canada and Mexico still need to approve the agreement before it can take effect. Several key US lawmakers had threatened to reject the pact unless the tariffs were removed, and Canada had suggested it would not ratify any deal while the tariffs were still in place.
US President Donald Trump imposed a 25 percent tariff on steel imports and 10 percent one on imported aluminium.
He cited Section 232 of the Trade Expansion Act of 1962, which empowers him to put a levy on products that the US Commerce Department determines to be a threat to national security.
The new agreement seeks to prevent cheap imports of steel and aluminium from entering North America. China has long been accused of flooding world markets with subsidized metal, driving down world prices and hurting US producers.
Bogged down in a sprawling trade dispute with China, Trump took steps on Friday to ease tensions with important trade allies by lifting the import taxes on Canadian and Mexican steel and aluminium and also delaying auto tariffs that would have hurt Japan and Europe.