The US has agreed to remove tariffs on imports of Canadian aluminium and steel, the two governments said on Friday.
The US imposed the tariffs under Section 232, which allows the country to do so if it deems that the imports threaten national security.
In addition, Canada agreed to remove the tariffs that it imposed in retaliation. Both countries agreed to end all pending legal proceedings they filed against each other in the World Trade Organization (WTO) in regards to the Section 232 tariffs.
The two countries also agreed to prevent the transshipment of aluminium and steel made outside of Canada and the US.
The US has imposed tariffs on steel and aluminium imports from other countries such as China, so the transshipment agreement would prevent those materials from entering the country tariff-free through Canada.
The agreement will take effect within two days.
It could presage ratification of the US-Mexico-Canada Agreement (USMCA), the trade deal intended to replace the North American Free Trade Agreement (NAFTA).
Mexico’s chief negotiator for the USMCA, Jesus Seade, said the US also removed the tariffs on Mexican imports of steel and aluminium. He said the move opens the way to advance the ratification of the trade deal.
Higher steel and aluminium tariffs harm the chemical industry in several ways.
Many companies are considering expanding petrochemical capacity, and steel and aluminium tariffs could make these projects more expensive.
Oil and gas companies rank among the largest steel users in the country. These sectors provide the feedstock and energy used by the petrochemical industry, and their higher costs could trickle down to chemical companies.
Midstream companies use metals to build the infrastructure and pipelines to collect, extract and distribute natural gas liquids (NGLs).
Some of the largest petrochemical end markets also use steel and aluminium. These include automobiles, construction and appliances.
Source: ICIS News
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