Washington, May 18: US President Donald Trump agreed to lift tariffs on metal imports from Mexico and Canada, removing a major irritant for two important allies that in exchange agreed to stop punishing American farmers with their own taxes on pork, cheese and milk.
At the same time, Mr Trump on Friday postponed a decision on whether to impose tariffs on automobiles imported from Europe, Japan and other countries for six months, setting a tight deadline for the United States to reach trade deals that have so far proved elusive, The New York Times reported.
Together, the actions remove the threat of an all-encompassing global trade war and allow Trump to focus on pushing China to agree to the United States’ trade terms, as well as pressuring Europe and Japan to reach a trade deal before the 2020 election. His trade war has hurt many of the farmers, who make up his political base, and he is eager to make good on a 2016 campaign promise to rewrite trade deals in America’s favor.
“I’m pleased to announce we’ve just reached agreement with Canada and Mexico. We’ll be selling our product into those countries without the imposition of tariffs,” Mr. Trump said on Friday. The easing of trade tensions in North America could give Mr Trump more leeway as he pursues an ambitious trade fight with China, which has imposed tariffs on American products in retaliation for the president’s levies on $250 billion worth of Chinese goods.
President Trump on Wednesday announced sweeping restrictions against Chinese telecom companies like Huawei, and he has threatened to tax all Chinese imports, prompting concerns from farmers and other businesses caught in the cross-fire.
The metal tariffs are linked to a broader free trade agreement, the newly negotiated Nafta, called the United States-Mexico-Canada Agreement. US President had described the tariffs as a source of leverage in negotiating a revision to that deal, which has yet to be ratified by legislatures in all three countries.
But both Republicans and Democrats had said they would not sign off on that deal until the White House removed metal tariffs on Canada and Mexico. They argue that the levies are raising costs for American companies and consumers, and that Canadian and Mexican retaliation is hurting American farmers and businesses.