Canadian Legislative News

On May 17, the United States officially lifted the steel and aluminum tariffs it imposed on Canada and Mexico, putting an end to the disruption that impacted the integrated North-American supply chain for nearly a year. Canada has, in turn, lifted its countermeasure tariffs on selected American goods. The automotive industry has been particularly affected by these tariffs as steel and aluminum are key to vehicle production.

These tariffs were imposed a year ago by the U.S. on steel and aluminum imports through the national security loophole under Section 232 of the Trade Expansion Act, inciting retaliatory countermeasures and a legal challenge against the U.S. at the World Trade Organization.

The Minister of Foreign Affairs Chrystia Freeland has indicated the government is moving with the ratification of USMCA now that the steel and aluminum tariffs have been removed. The government position was clear that as long as the metal tariffs were maintained by the Trump administration, Canada was not moving forward with ratification.

The Liberals are working on a shortening timeline, as the House is set to leave for the summer and will not sit until after the election this fall. It has introduced the USMCA ratification bill in the House of Commons this week and is calling on members of Parliament to support the new trade deal in order to facilitate ratification and implementation.

Even if the deal is passed in the House of Commons in Canada before the federal election, the path to ratification is still unclear in the U.S. Congress. The U.S. House of Representatives has issues with the enforcement of the labor and environmental provisions in the deal.

While a lot remains uncertain regarding the ratification of USMCA, the deal reached by Canada, the U.S., and Mexico on steel and aluminum is a major achievement.