U.S. to halve tariffs on Canada steel, aluminum, reports say

Steel can liners on the production line at the Ideal Can manufacturing facility in Saint-Apollinaire, Quebec. (Graham Hughes/Bloomberg)

The tentative trade deal between the U.S. and Canada would lower tariffs on certain Canadian exports of steel and aluminum to 25%, according to people familiar with the matter.

The details have yet to be finalized and are not expected to apply across the board. Different rates could apply to some derivative products that include those metals, said some of the people, who requested anonymity to discuss terms of the agreement before it is announced. 

Talks between U.S. and Canadian trade advisers continued Aug. 19, less than 24 hours after President Donald Trump paused planned 50% levies on billions of dollars of Canadian goods to allow more time to negotiate. The planned changes to the metals tariffs could help unlock a lasting deal to avert the broader duties before an Aug. 21 deadline.

Trump in the past has demanded changes to trade agreements or spiked them entirely at the last minute.  

The move under discussion would generally halve U.S. tariffs on imports of the two metals, which currently face a 50% rate. The countries are also discussing exclusions and other measures that would change the scope of the levies, some of the people said. 

The full terms of the broader deal under discussion remained unclear as of afternoon Aug. 19.

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Trump and Carney speak during the G7 summit on June 16. (Evelyn Hockstein/AFP/Getty Images via Bloomberg)

The White House, the office of the U.S. Trade Representative and office of the Canadian Prime Minister Mark Carney did not immediately respond to requests for comment. 

On Aug. 19, Trump nodded to U.S. concessions in the ongoing talks. “Got to give something, and we’re doing certain things. We’re paying a high number. We’re reducing it a little bit,” Trump told reporters, without elaborating. “It’s good for everybody, but our farmers are going to be thrilled. Our manufacturers are going to be thrilled.”

Trump announced late Aug. 18 that he would pause implementation of the tariffs on Canadian goods for three days after the two sides signaled progress toward an agreement on tariffs. The two close allies, which did roughly $900 billion in trade in goods and services last year, have seen their relationship come under deep strain as Trump has ratcheted up trade pressure on Canada during his second term. 

Last year, Trump imposed tariffs on imported steel and aluminum under Section 232 of the Trade Expansion Act as he erected his tariff wall around the U.S. economy. The duties irked many close U.S. trading partners and several negotiated deals with the administration to cap sectoral tariffs in exchange for making trade concessions. 

Canada had focused its efforts on lowering the steel tariff, in particular, as well as the duties on automobiles. Canada is the top source of U.S. aluminum imports, though the U.S. has no capacity to meet its own demand and those tariff costs have been largely passed on in entirety to American buyers.  

However, even as they work to fine tune the details, Trump administration officials are under pressure to avoid applying a reduced rate uniformly across steel and aluminum imports from Canada, some people familiar with the discussions said.

The Coalition for a Prosperous America, a manufacturing advocacy group that has supported tariffs, and other stakeholders have lobbied the Trump administration to combine any aluminum tariff reduction with so-called traceability requirements meant to better protect U.S. fabrication that makes up the bulk of the domestic aluminum industry. 

At risk, they warn, are some 125,000 jobs in the U.S. tied to aluminum rolling, drawing and extruding. 

Imported Canadian supplies currently make up about half of U.S. aluminum consumption.

Written by Josh Wingrove, Jennifer A. Dlouhy and Alicia Diaz