Why this business insider thinks a steel and aluminum deal is imminent

A former top Canadian trade negotiator says a deal with the Trump administration for tariff relief on Canadian steel and aluminum exports to the U.S. is likely soon.

Tim Sargent was Ottawa’s Deputy Minister of International Trade from 2016 to 2018, while the Canada–U.S.–Mexico Agreement (CUSMA) was being negotiated during Donald Trump’s first term as President.

sergeant Talks on steel and aluminum have gained renewed momentum since Trump hosted Prime Minister Mark Carney at the White House earlier this month, he told an audience in Washington on Wednesday.

“It is in America’s economic self-interest to come to an agreement on these areas,” Sargent said during a panel discussion. Center for Strategic and International Studies, a Washington think-tank.

“Both parties are interested in resolving these quickly,” he said.

In a later interview, Sargent said he would not be surprised if an agreement on steel included what are called tariff-rate quotas: allowing a certain amount of Canadian steel into the US each year with zero or minimal tariffs, then allowing dramatically higher tariffs on all imports in excess of the annual quota.

Sargent says the Trump administration is getting this kind of response from U.S. manufacturers against tariffs on Canadian products: “Why are you raising the price of my intermediate inputs? What you’re doing is making me less competitive with foreign imports into the U.S.”

America has 50 percent tariff on steel and aluminum imports From Canada and the rest of the world since June.

at the end of that Meeting with Carney on October 7Trump Instructed his two top trade officials—Commerce Secretary Howard Lutnick and Trade Representative Jameson Greer— “To get deals done quickly” on steel, aluminum and energy, according to Canada-US Trade Minister Dominic LeBlanc.

Trump ‘likes what he calls deals’

As such The deal could be ready for Trump and Carney to sign at the Asia-Pacific Economic Cooperation (APEC) summit later this month. The Globe and Mail reported this week, citing two unnamed sources.

“The president likes to have what he calls deals,” said Sargent. “The prospect of being able to get in front of the cameras at APEC with his new friend the Prime Minister of Canada and announce an agreement, I think, has some appeal for the president.”

Carney and his team did not deny the Globe and Mail report outright, but sought to downplay expectations of an agreement in time for the summit.

“We’ll see. We’re continuing to have discussions with the Americans, and I wouldn’t overdo it,” Carney. told reporters in Ottawa on Tuesday.

There are conversations ““It’s at a level of detail that we haven’t seen before, but we still have work to do,” LeBlanc said.

While Sargent is optimistic about the prospects for a quick agreement to reduce tariffs on steel and aluminum, he is pessimistic about the likelihood that CUSMA renegotiations will bring about a true free trade agreement with a protectionist administration like Trump.

“The big challenge for Canada — and I hope this is true for Mexico as well — is there’s not much left in terms of market access that the U.S. wants,” he told the panel on the future of North American trade and security.

This means Canada is faced with having to renegotiate a free trade agreement with a partner that actually wants less free trade and is actively poking holes in the existing deal.

“The big fear is (CUSMA) is going to be a Swiss cheese of a deal,” Sargent said.

Philip Luck, former deputy chief economist at the US State Department, told the panel that the best hope for Canada and Mexico to be exempt from tariffs on steel, aluminum and automobile imports is that the Trump administration is increasing its focus on China’s impact on the US economy.

How North American trade negotiations play out next year will largely depend on “how much the administration’s focus is on bringing domestic production and manufacturing back to the United States, versus how much it is on limiting our exposure to some other economies, namely China,” Luck said.