U.S., Mexico and Canada Near Deal on Metal Tariffs, Mnuchin Says

WASHINGTON — The United States is nearing an agreement with Mexico and Canada to roll back its tariffs on steel and aluminum imports, Treasury Secretary Steven Mnuchin said Wednesday, potentially ending a standoff that has heightened tension among the three countries since President Trump imposed the duties last year.

Mr. Mnuchin said at a Senate hearing that Mr. Trump had instructed his trade advisers to find a solution to the matter. The persistence of the tariffs has angered Canada and Mexico, which hoped they would be lifted after the countries agreed to a revised version of North American Free Trade Agreement last year. The possibility that a resolution to the matter is at hand suggests that Mr. Trump is seeking to smooth relations with America’s neighbors to the north and south as his trade dispute with China escalates.

“I think we’re close to an understanding with Mexico and Canada,” Mr. Mnuchin said. “I can assure you it is a priority of ours.”

He added that resolving the tariff issue was an important part of approving the new Nafta deal, known as the United States Mexico Canada Agreement.

After the hearing, Mr. Mnuchin said he was not ready to say that the United States would be lifting tariffs.

The Trump administration imposed tariffs of 25 percent on steel and 10 percent on aluminum imports from around the world last year, saying that the pressure they had put on the country’s domestic metal industries posed a national security threat. Mexico and Canada, both of which retaliated with tariffs of their own, have appeared near an agreement on the duties before, but Mr. Trump has been hesitant to relent because of his belief that the health of America’s steel and aluminum sectors was too important to give in.

Republicans and Democrats in Congress have been sharply critical of the tariffs, warning that the new Nafta deal would not pass until they were removed.

Canada’s finance minister, Bill Morneau, told The New York Times last month that the levies could jeopardize his country’s ratification of the agreement.

In a possible sign of progress, Chrystia Freeland, Canada’s foreign minister, is expected on Wednesday to meet with Robert E. Lighthizer, Mr. Trump’s top trade negotiator, in Washington to discuss the issue.

Mexican officials have also expressed optimism on the topic. A senior Mexican official said this week that recent talks about removing the tariffs had been “fruitful.”

The United States has been trying to persuade Canada and Mexico to agree to a quota system for steel and aluminum in exchange for rolling back the tariffs. Canada and Mexico have argued that such quotas should not be necessary. It is unclear what terms the three countries are close to settling on.

Senator Chuck Grassley, Republican of Iowa and the chairman of the Senate Finance Committee, said he had been pressing Mr. Trump to eliminate the tariffs completely.

“It’s critical to the credibility of our global trade agenda,” Mr. Grassley told reporters on Tuesday. “I say the president needs to lift these tariffs.”

A potential breakthrough on the metal tariffs comes as Mr. Trump considers imposing tariffs on automobile imports. Analysts expect he will delay that decision, which has been scheduled for Friday, as markets have been on edge over the administration’s recent increase in tariffs on $200 billion of Chinese imports to 25 percent from 10 percent.

Mr. Mnuchin reiterated on Wednesday that China had recently retreated from commitments that it made in trade negotiations with the United States. He said he had no immediate plans to travel to Beijing, but that it was likely he and Mr. Lighthizer would do so before Mr. Trump’s scheduled meeting with President Xi Jinping of China at the G20 summit in Japan in June.

Asked after the hearing about the prospect of a deal with China, Mr. Mnuchin was cautious.

“I’m hopeful,” he said. “I wouldn’t say I’m confident.”

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