Trump postpones decision on imposing steel and aluminum tariffs on Canada to June 1

A crane maneuvers a roll of steel above a storage area ahead of shipping from the Salzgitter AG plant in Salzgitter, Germany, on Thursday, March 22, 2018. The European Union believes it's on track to be exempted from imminent U.S. tariffs on foreign steel and aluminum, dialing down the risk of a trans-Atlantic trade war. Photographer: Alex Kraus/Bloomberg

With just hours remaining before Canada's exemption from new U.S. tariffs on steel and aluminum was set to expire, the United States postponed its decision on whether to impose the tariffs until June 1.

U.S. President Donald Trump ordered sweeping tariffs in March of 25 per cent on steel imports and 10 per cent on aluminum, but granted temporary exemptions to certain countries. In the case of Canada and Mexico, Trump's administration tied both countries' tariff exemptions to the successful renegotiation of the North American Free Trade Agreement.

Canada's exemption period was officially set to end at midnight April 30. But late Monday, Trump decided to give Canada, Mexico and the European Union another month to work out a deal with the Americans.

The Trump administration issued a statement saying it had come to a final agreement with South Korea on steel imports and had reached agreements in principle on steel and aluminum with Argentina, Australia and Brazil.

"The Administration is also extending negotiations with Canada, Mexico, and the European Union for a final 30 days. In all of these negotiations, the Administration is focused on quotas that will restrain imports, prevent transshipment, and protect the national security," the statement said.


Earlier Monday, Commerce Secretary Wilbur Ross told Bloomberg News that the White House would continue to grant some countries relief from the metals tariffs, but wouldn't name any nations.

A White House official said the only thing that could stop the tariffs from being imposed on Canada was a new presidential order.

"Absent any additional presidential proclamation, all tariffs would go into effect at midnight," the official said. "So in order for the exemptions to be extended or made permanent, a new proclamation would have to come from us like the original ones did."

Prime Minister Justin Trudeau said earlier Monday he'd spoken to Trump on the issue and was confident the administration understands tariffs would hurt jobs on both sides of the border.

"We continue to work with the administration but we are optimistic that they understand that this would be a bad thing for both of our economies," Trudeau told a crowd in Vancouver.

International Trade Minister François-Philippe Champagne said Ottawa has been pushing for a full exemption, adding that Foreign Affairs Minister Chrystia Freeland has been engaging with her counterparts on the issue.

"Any tariff would be completely unacceptable. We said it from Day 1. We've said Canada is not the problem, Canada is part of the solution," he told reporters Monday.

A spokesperson for Freeland expressed hope the U.S. will not impose tariffs. 

"Canada will continue to work to secure good, stable jobs for steel and aluminum workers on both sides of the border," said press secretary Adam Austen in an email to CBC News. 

"As the prime minister said today, ‎we remain confident that the U.S. administration understands that tariffs would hurt American jobs as much as they would hurt Canadian jobs."

Canada introduced new measures

Canada has used the past few weeks of uncertainty to bring in new measures to crack down on companies that try to ship cheap foreign steel and aluminum through the Canadian market — points Trudeau emphasized in a recent phone conversation with Trump.

Trudeau also used the exemption period to tour steel factories across Canada in an attempt to ease workers' anxieties.

Tuesday's deadline coincides roughly with the end of a political timeline for finishing a new NAFTA agreement this year.

The Trump administration has expressed the fear that allowing the NAFTA negotiations to drag on past May could endanger an agreement, given the political calendar. The U.S. ratification process will take months to complete, and the opposition Democrats could regain control of Congress in the fall midterm elections. Mexico is also heading into a national election this July.

The current round of NAFTA talks is set to resume late next week.