WASHINGTON – President Donald Trump will suspend tariffs on steel and aluminum that were imposed on Canada and Mexico a year ago in an effort to gain leverage in broader trade negotiations, the White House said Friday.  

Trump was poised to lift the tariffs in coming days, said two sources familiar with the deal who spoke on the condition of anonymity to discuss details of an announcement not yet made public. The president announced a deal in broad outlines during a previously scheduled speech in Washington on Friday.

“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 said during an address to the National Association of Realtors. “Big difference.”  

Trump drew howls from allies last May when he used an obscure provision of a 1962 law to claim a trade imbalance in metals presented a national security risk to the U.S. In one of the first concrete steps Trump took on trade, the president levied a 25% tariff on steel and a 10% tariff on aluminum from Canada, Mexico and the European Union.

A spokesman for Canadian Prime Minister Justin Trudeau said Trudeau spoke with Trump Friday about the tariffs. Trudeau has scheduled a news conference at a steel factory on Friday afternoon.  

Trump negotiated a new trade deal with Mexico and Canada last year, which Trump dubbed the USMCA, and the existing tariffs were considered a roadblock to getting that deal to Congress. The new trade agreement is intended to replace the controversial NAFTA  deal that was signed by President Bill Clinton in 1993. 

The decision to pull back metal tariffs was the latest in a series of moves the White House made late in the week to pump the brakes on the president’s more aggressive trade position.

Trump separately backed down from a threat Friday to impose a tariff as high as 25% on foreign cars made in Japan and the European Union. Facing a deadline to address those imports, which the administration said also poses a national security threat, Trump signed a proclamation Friday to delay the decision for six months. 

Trump announced a daily earlier he would reduce tariffs that had been imposed on steel made in Turkey.  

On the other hand, the president has ratcheted up pressure on China. As talks continue with Beijing, Trump allowed higher tariffs to kick on $200 billion in Chinese imports and is moving to increase tariffs on another $325 billion in goods.

Mexico and Canada had responded to Trump’s metal tariffs last year by threatening retaliatory tariffs of their own. The Mexican economic ministry, for instance, said it would move to place new tariffs on U.S.-made pork, flat steel, apples, cheese and other products.

Detroit’s three automakers each paid billions in 2018 because of the increased duties on metal. At GM, for example, tariffs and commodity costs dinged its 2018 earnings by about $1 billion. Ford reported a similar impact and Fiat Chrysler reported about a $500 million hit.

The American Automotive Policy Council, which represents FCA, Ford and GM, praised the agreement.

“We are hopeful that the agreement will effectively resolve the issue between the three trade partners,” the group said in a statement. 

Contributing: Detroit Free Press

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