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Trump reaches deal to lift steel, aluminum tariffs on Mexico, Canada

The U.S. has reached a deal to lift steel and aluminum tariffs on Canada and Mexico, removing a significant roadblock for congressional approval of President TrumpDonald John TrumpBiden holds massive cash advantage over Trump ahead of Election Day Tax records show Trump maintains a Chinese bank account: NYT Trump plays video of Biden, Harris talking about fracking at Pennsylvania rally MORE's revision of the North American Free Trade Agreement (NAFTA).
 
Trump alluded to the deal in remarks to the National Association of Retailers in Washington, D.C., saying he hoped it would benefit U.S. industries and lead to the passage of the U.S.-Mexico-Canada Agreement.
 
The president appeared to skip over an explicit mention of the steel tariffs, but said the three nations had reached an agreement to sell "our product into those countries without the imposition of tariffs or major tariffs."
 
"That deal is going to be a fantastic deal for our country, and hopefully Congress will approve the USMCA quickly and then the great farmers, and manufacturers and steel plants will make our economy even more successful than it already is, if that’s possible," Trump said.

The Washington Post reported the U.S. will lift tariffs within 48 hours in exchange for new measures that would block Chinese steel from entering the U.S. from Mexico and Canada, a practice known as transshipment. 

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The deal clears a roadblock for Congress to pass the U.S.-Mexico-Canada Agreement (USMCA), the trade deal Trump negotiated to replace NAFTA.

Senate Finance Committee Chairman Chuck GrassleyCharles (Chuck) Ernest GrassleyGOP noncommittal about vote on potential Trump-Pelosi coronavirus deal Republicans: Supreme Court won't toss ObamaCare Barrett sidesteps Democratic questions amid high-stakes grilling MORE (R-Iowa), whose committee has jurisdiction over trade, said he would not advance the trade agreement unless Trump dropped the steel and aluminum tariffs on Mexico and Canada.

The deal also saw its prospects of passage rise following a Wednesday meeting between House Speaker Nancy PelosiNancy PelosiOn The Money: McConnell says he would give Trump-backed coronavirus deal a Senate vote | Pelosi, Mnuchin see progress, but no breakthrough | Trump, House lawyers return to court in fight over financial records Progress, but no breakthrough, on coronavirus relief McConnell says he would give Trump-backed coronavirus deal a vote in Senate MORE (D-Calif.) and U.S. Trade Representative Robert LighthizerRobert (Bob) Emmet LighthizerWhiskey, workers and friends caught in the trade dispute crossfire GOP senator warns quick vote on new NAFTA would be 'huge mistake' Pelosi casts doubt on USMCA deal in 2019 MORE.

“The biggest hurdle to ratifying USMCA has been lifted," Grassley said in a statement Friday hailing the news. "I made no secret that these tariffs had to be lifted for USMCA to pass Congress. The Trump administration has done its part. Now it’s Congress’s turn."

Trump imposed the tariffs in March 2018 on major U.S. trade partners, including the EU and Japan, where the tariffs remain in place.

Friday’s agreement will alleviate some political pressure on Trump, whose critics have hit him for waging a multipronged trade war instead of cooperating with allies against China.

Last week, as negotiations with China over a new trade deal hit a bump, Trump announced a tariff increase on $200 billion worth of Chinese imports. China responded by announcing tariff increases of their own on $60 billion of American products sold to China.

Negotiations have shown little sign of progressing, as Trump threatened new tariffs on $300 billion of Chinese goods and Chinese officials sounded off against U.S. “bullying” in state media.

Trump also decided Friday to postpone proposed auto tariffs for 180 days, putting off potential confrontations with close U.S. allies and trade partners. 

This story was updated at 4:23 p.m.