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[ferro-alloys.com]The US "very much" wants to come to an agreement with Canada and Mexico regarding alternate arrangements to the US Section 232 tariffs on steel and aluminum, however, whether such an agreement will be reached remains unclear, United States Trade Representative Robert Lighthizer said Wednesday.

Testifying to the House Ways and Means Committee in a hearing on current trade negotiations between the US and China, Lighthizer said discussions with Canada and Mexico on the tariffs are ongoing.

"On Canada and Mexico, in the context of maintaining the integrity of the steel and aluminum program, we want very much to work out an agreement with Canada and Mexico and we're in the process of doing that," Lighthizer said. "Whether we will succeed or not, I don't know, but it certainly my hope we will do that."

Canada and Mexico were granted a temporary exemption from the tariffs of 25% on steel imports and 10% on aluminum imports when they took effect in March 2018 as the countries were in the midst of broader trade discussions; however the US ended the temporary reprieve June 1.

The tariffs on steel and aluminum remain a sticking point in passing an updated trade agreement between the US and its North American trading partners. The US, Canada and Mexico reached a deal to replace the existing North American Free Trade Agreement in November, but legislators in all three countries must approve a final agreement. Several US lawmakers have called for an end to the tariffs on Canada and Mexico before the trade deal is approved.

The passage of the USMCA is a top priority because if Congress rejects the deal, it would harm the US trade negotiation team's credibility with China and other trading partners, Lighthizer said.

"If the Congress doesn't see fit to pass [the USMCA], then everything else we're talking about is kind of like a footnote because it will mean we can't do trade deals and we're not going to be in the trade space," he said. "It would be such an admission of failure by all of us. ... There is no trade program in the US if we don't pass USMCA."

(S&P Global Platts)

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