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Trump lifts tariffs on Mexico and Canada amid China trade dispute

18 May 2019

Trudeau and Trump had discussed the steel tariffs earlier Friday, Trudeau's office said, according to CBC. They don't want our farm products, they don't want our cars.

Trump also announced on Friday that the administration will postpone proposed auto tariffs on the European Union and Japan for 180 days.

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 administration argues that US automakers' declining share of the domestic market coupled with foreign trade barriers is eroding USA innovation.

Reacting to the announcement, Dieter Kempf, head of the German industrial federation, said "cars do not threaten the national security of the United States".

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That was even before the Liberal government stumped up a $2-billion package to defend the industry against the tariffs.

"The truth stands: imported autos and auto parts are simply not a national security threat", said Cody Lusk, president of the American International Automobile Dealers Association. However, Senate Finance Committee Chairman Chuck Grassley, a Republican from Iowa, said he would not approve it unless the president eliminated the steel and aluminum tariffs.

Trudeau offered a shout-out to Canadian unions for their support, and said it helped the government hold firm to US demands that it submit to quotas before lifting the tariffs.

Trump issued a proclamation, directing U.S. Trade Representative Robert Lighthizer to continue to negotiate agreements to address the threat.

The metals tariffs were a major irritant for Canada and Mexico and had caused them to halt progress toward ratification the new U.S. -Mexico-Canada Agreement, the trilateral trade deal to replace the 25-year-old North American Free Trade Agreement. The Automotive Policy Council, representing the Big Three American automakers, said Friday that tariffs "would weaken global competitiveness and invite retaliation from our trading partners, which could harm jobs and investment in the U.S". The White House has declined to make those findings available to lawmakers, who widely oppose the prospect of auto tariffs.

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Trump's proclamation said "domestic conditions of competition must be improved by reducing imports" and said a strong USA auto sector is vital to US military superiority.

"But it looks like some sense of sanity has prevailed in the White House at long last, helped along the way by huge pressure from the US private sector that found these surcharges to be very hurtful".

American allies Mexico, Canada, Japan and Germany are the leading sources of imported cars and trucks.

U.S. Commerce Secretary Wilbur Ross told Trump that "successful negotiations could allow American-owned automobile producers to achieve long-term economic viability and increase R&D (research and development) spending to develop cutting-edge technologies that are critical to the defence industry".

Trump's tariffs have tested the bilateral relationship with Canada, especially during the NAFTA negotiations past year.

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Trump lifts tariffs on Mexico and Canada amid China trade dispute