Then-Mexican president Enrique Pena Nieto, US President Donald Trump and Canadian Prime Minister Justin Trudeau sign the US-Mexico-Canada Agreement (USMCA). Photo: AFP / Saul Loeb

US President Donald Trump announced on Friday that his administration will be lifting tariffs on steel and aluminum imported from Canada and Mexico.

The move potentially paves the way for legislative approval in all three countries of the re-negotiated North American Free Trade Agreement. It also signals a cooling of trade tensions between the allies as negotiations between the US and China face uncertainty.

“I’m pleased to announce that we’ve just reached an agreement with Canada and Mexico,” Trump said, speaking to a gathering of the National Association of Realtors.

“And we’ll be selling our product into those countries without the imposition of tariffs or major tariffs – big difference.”

The new NAFTA, renamed the US-Mexico-Canada Agreement (USMCA), faced obstacles to approval in all three of the trading partners. In Canada and Mexico, there was substantial political opposition to ratifying the deal while the metals tariffs were still in effect.

Republican lawmakers in the US Senate also threatened to block the deal unless Trump lifted the import duties.

“Hopefully Congress will approve the USMCA quickly, and then the great farmers, manufacturers and steel plants will make our economy even more successful than it already is – if that’s possible, which it is possible,” Trump said in his speech on Friday.

The Trump administration imposed the 25% tariffs on steel and 10% tariffs on aluminum in May of last year, prompting swift retaliation from Canada, Mexico and the European Union.

According to a joint statement issued by Canada and the US, the metals tariffs and Canada’s retaliatory tariffs will be eliminated within two days.

The deal comes during a whirlwind week of trade developments, including Trump’s decision to declare imports of foreign autos and auto parts a threat to national security. Like the tariffs on steel and aluminum, tariffs on cars would primarily target key US allies while the administration is also engaged in an economic confrontation with China.

The Trump administration imposed an arbitrary deadline of 180 days for auto export nations to negotiate a settlement on the issue, after which the US president will “determine whether and what future action needs to be taken.”

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