Canada reaches deal with US to drop steel, aluminum tariffs

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Korean automakers including Kia Motors Corp. advanced on news the proclamation will exempt South Korea from any future tariffs because it renegotiated the U.S. -Korea Free Trade Agreement past year. Charles E. Grassley of Iowa, the powerful Finance Committee head, had said they would not approve the North American trade deal while the tariffs were in place.

The White House doesn't need to take six months to make a decision, and it's unclear how much time it expects it needs to finalize its choice.

The hostilities between the world's two biggest economies have weighed heavily the past couple of weeks on the USA stock market, threatening a long rally that Trump touted as a vindication of his economic policies. He's working on legislation to scale back the president's authority to impose national security tariffs under Section 232.

"We are convinced that the products hard-working Americans in the auto sector design, build, sell, and service are not a threat to our national security", the letter said.

The agreement also outlines a process for reimposing the tariffs if one of the countries experiences a "surge" of imported steel or aluminum.

Iowa farmers were among the casualties of Mexican retaliatory tariffs, which cut deeply into USA agricultural exports. But sources in industry and government on both sides of the border cautioned that Canada is not out of the woods yet: Canada will likely have to agree to tough new export rules on its metals industry that will benefit the U.S.in exchange for the end of tariffs. The president however, acknowledged a February report from Commerce Secretary Wilbur Ross that found "automobiles and certain automobile parts are being imported into the United States in such quantities and under such circumstances as to threaten to impair the national security of the United States". That gives trade negotiators 180 days to work out a deal with Japan and the European Union before resorting to tariffs, which would increase the cost of foreign-made cars and parts in the United States.

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

In a conclusion likely to invite challenges from manufacturers and industry analysts, Trump said America's defense industrial base relied on the domestic auto sector for technological advances essential to United States "military superiority".

But the statistics don't match market share figures from the industry. A message was left Friday seeking an explanation of how Commerce calculated the 22%.

The tariffs will fall within two days, according to a joint U.S. Those figures include vehicles produced in other countries. Steel prices have been dropping to the point where selling into the USA with a 25 per cent tariff was unprofitable. Toyota, Hyundai-Kia, Subaru, Honda and others have significant research centers in the U.S. After he announced the tariffs, more than 100 Republican members of Congress signed a letter criticizing the move.

Meanwhile, Trump is locked in a high stakes rumble with China.

The hostilities between the world's two biggest economies have weighed heavily the past couple of weeks on the USA stock market, threatening a long rally that Trump touted as a vindication of his economic policies.

The decision marked a temporary reprieve from what would have been a sizeable escalation in Trump's multi-front trade wars.

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