Canada pushes for permanent tariff exemption; industry worried

OTTAWA (Reuters) - Canada will push for a permanent exemption from U.S. steel and aluminum tariffs but the U.S. administration’s decision to postpone them is a “step forward”, Canadian Foreign Minister Chrystia Freeland said on Tuesday.

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Canada has argued that the tariffs, which had been set to go into effect on Tuesday, would hurt jobs in both countries.

The Trump administration said on Monday that the 25 percent tariff on steel imports and 10 percent tariff on aluminum imports from Canada and Mexico would be suspended until June 1.

“Last night’s decision is certainly a step forward,” said Freeland to reporters. “Canada will continue to work for a full and permanent exemption.”

Freeland said it is “inconceivable” that Canada could threaten U.S. national security. The tariffs are based on a 1962 U.S. law that allows safeguards based on “national security.”

Speaking on Monday before the delay announcement, Canadian Prime Minister Justin Trudeau said the tariffs were a “very bad idea” guaranteed to disrupt trade between the two nations.

The tariffs, as well as Trump’s insistence that Canada and other nations accept the idea of import quotas, look set to further complicate slow-moving talks to update the North American Free Trade Agreement.

The influential auto lobbies in Canada and Mexico are upset by new U.S. proposals for increasing NAFTA’s regional content for vehicles produced in the three member nations of the 1994 trade pact.

The Aluminium Association of Canada on Tuesday said the U.S. move to put off a decision would only increase uncertainty affecting the industry worldwide.

“Nothing less than a permanent and total exemption is required as soon as possible,” Jean Simard, the association’s president, said in a statement.

Reporting by David Ljunggren; Editing by Jeffrey Benkoe and Susan Thomas