US reaches a deal with Canada and Mexico to lift steel and aluminum tariffs

The United States has reached a deal with Canada and Mexico to lift steel and aluminum tariffs, a step toward congressional approval of the United States-Mexico-Canada agreement, the Washington Post reported mid-day Friday. U.S. officials agreed to lift the tariffs in 48 hours in exchange for new measures that would prevent Chinese steel to enter the U.S. by way of Canada and Mexico. The agreement also excludes quotas on steel from those two countries, an idea they had opposed, the Post reported. Canada and Mexico are now expected to lift retaliatory tariffs on U.S. goods including beef and pork. "We thank the administration for ending a trade dispute that has placed enormous financial strain on American pork producers," National Pork Producers Council President David Herring said. "Mexico's 20% retaliatory tariff on U.S. pork has cost our producers $12 per animal, or $1.5 billion on an annualized, industry-wide basis. Removing the metal tariffs restores zero-tariff trade to U.S. pork's largest export market and allows NPPC to focus more resources on working toward ratification of the U.S.-Mexico-Canada Agreement (USMCA), which preserves zero-tariff trade for U.S. pork in North America." In response tp the U.S. tariffs on Canadian and Mexican steel (25%) and aluminum (10%), Canada applied a 10% duty on U.S. cooked/prepared beef products. And Mexico ultimately raised its duty rate on pork muscle cuts to 20%, while also taxing sausages at 15% and some prepared hams at 20%. According to the U.S. Meat Export Federation (USMEF), U.S. beef exports to Canada were down 14% in both volume (23,199 metric tons) and value ($143.8 million) in the first quarter of 2019. First quarter U.S. pork exports to Mexico were down 13% year-over-year in volume (177,420 mt) and sank 29% in value ($261.9 million). U.S. tariffs on Chinese aluminum and steel also have impacted U.S. pork and beef. In retaliation, China ultimately upped duties on frozen pork muscle cuts and variety meats to 62%, from %12. Through March, U.S. pork exports to the China/Hong Kong region were 20% below last year’s pace in volume (89,689 mt) and down 34% in value ($172.1 million), USMEF said. Beijing also raised its rate on U.S. beef muscle cuts and variety meats to 37%, from 12%. U.S. exports to China were up 4% from a year ago to 1,723 mt, but at lower prices as export value fell 17% to $13.2 million. Most beef suppliers to China are subject to a 12% duty, but New Zealand is duty-free and Australia only pays a 6% rate. Australia’s grain-fed beef exports to China in the first quarter totaled 14,347 mt, up 77% year-over-year, according to USMEF.