U.S. Nears Deal with Canada and Mexico Over Removing Metals Tariffs

(Bloomberg) -- The Trump administration is nearing a deal with Canada and Mexico to remove U.S. steel and aluminum tariffs as part of discussions about a new trade agreement among the three countries, Treasury Secretary Steven Mnuchin said Wednesday.

"I think we are close to an understanding with Mexico and Canada" on removing steel and aluminum tariffs, Mnuchin told a Senate Appropriations subcommittee hearing. U.S. Trade Representative Robert Lighthizer is in “active discussions” over the issue, he said.

Senate Finance Committee Chairman Chuck Grassley, an Iowa Republican, has said he would block ratification of Trump's revision of the North American Free Trade Agreement, called the U.S.-Mexico-Canada Agreement, until the metals tariffs are lifted on the U.S. neighbors. Both Canada and Mexico have imposed their own tariffs on American agricultural exports and other goods in retaliation for the levies.

U.S. officials have insisted they will only lift the tariffs if Canada and Mexico accept quotas or other mechanisms that would avoid them becoming a conduit for cheap steel entering the U.S. from other countries including China. Both Canada and Mexico have so far resisted such a plan.

Separately, Mnuchin told reporters after the hearing that he's “hopeful” the U.S. can reach a trade deal with China. “I wouldn’t say I’m confident,” Mnuchin added.

To contact the reporters on this story: Saleha Mohsin in Washington at smohsin2@bloomberg.net;Shawn Donnan in Washington at sdonnan@bloomberg.net

To contact the editors responsible for this story: Alex Wayne at awayne3@bloomberg.net, Justin Blum

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