Canada and Europe have reached a deal to avoid potential tariffs on aluminum exports to the United States, following months of negotiations and uncertainty.
The agreement, announced on Friday, will see Canada agree to limit its aluminum exports to the U.S. in exchange for being exempt from any potential tariffs. This comes after the U.S. reimposed a 10 per cent tariff on Canadian aluminum in August, citing national security concerns.
The deal was reached just hours before the U.S. was set to announce the tariffs, which would have been met with retaliatory measures from Canada and the European Union.
In a joint statement, Canada’s Deputy Prime Minister Chrystia Freeland and European Trade Commissioner Valdis Dombrovskis said the agreement “fully protects” the interests of both Canada and the EU.
“This is a win-win situation for both sides,” the statement read. “We have agreed to prevent the diversion of aluminum from Canada and Europe into the United States.”
The deal includes a provision that would allow either side to impose tariffs if there is a surge in imports, but only after consultations between the two parties.
The U.S. had previously imposed tariffs on Canadian steel and aluminum in 2018, but lifted them in 2019 after reaching a deal with Canada and Mexico to replace the North American Free Trade Agreement (NAFTA).
However, in August, U.S. President Donald Trump announced that he would reimpose the tariffs on Canadian aluminum, citing concerns about a surge in imports. Canada responded by announcing retaliatory measures, including a list of U.S. products that would be subject to tariffs.
The potential tariffs were met with criticism from both sides of the border, with Canadian officials calling them “unwarranted and unacceptable” and the EU threatening to retaliate with tariffs on U.S. products.
The agreement between Canada and Europe is seen as a positive step towards resolving the ongoing trade disputes between the U.S. and its allies. It also comes as the U.S. prepares for a presidential election in November, with trade being a key issue for both candidates.
In a statement, the U.S. Trade Representative’s office said it welcomed the agreement and would continue to monitor aluminum imports from Canada and Europe.
The deal is set to be reviewed after six months, with the possibility of extending it for a longer period of time. Both Canada and Europe have expressed their commitment to maintaining a strong and mutually beneficial trade relationship with the U.S. in the future.
