Trump imposed the 10 per cent tariff on raw aluminum from Canada on August 16 under Section 232 of the U.S. Trade Expansion Act, which states the imports pose a threat to American national security, amid condemnation from aluminum organizations on both sides of the border.
The office of the U.S. Trade Representative says it will lift the tariffs retroactive to September 1 because it expects Canadian exports to "normalize" over the remainder of the year.
OTTAWA-The United States has dropped its latest round of tariffs on Canadian aluminum products just hours before Canada was set to unveil its own list of retaliatory penalties against American imports.
The official added that, "We're glad the USA lifted tariffs - that's a victory for Canada and the U.S".
Canada called the move "unjustified and unacceptable", but the United States said the 2019 agreement that exempted Canada from the duties provided for monitoring of the imports and allowed tariffs to be re-imposed should volumes surge.
The news came two hours before Canada was set to unveil $3.6-billion in retaliatory measures on USA imports in response to the aluminum tariffs.
Finance Minister Chrystia Freeland and International Trade Minister Mary Ng are due to make the announcement at 3 p.m.in Ottawa. Mr. Trump has frequently used Section 232 to circumvent global trade rules, such as those of the U.S. -Mexico-Canada Agreement and the World Trade Organization.
The list of potential targets includes goods such as appliances, drink cans, office furniture, bicycles and golf clubs.
Trade minister Mary Ng told reporters Tuesday that Canada will not be imposing reciprocal tariffs on the US after it dropped its aluminum levies, but if the USA decides to reimpose tariffs again, Canada will not back down.
The trio wrote to Trump asking him to consider the "negative consequences" for consumers and American suppliers.
The US first imposed tariffs on foreign steel and aluminium in 2018, citing national security concerns.
The US said it was backing off after determining that imports were likely to decline after an earlier surge.
He said the resumption of classes and the reopening of the Canadian economy, meaning more people are back to work, had led to an increase in case numbers. He then lifted them previous year on Canadian and Mexican metals to smooth the way for the US-Mexico-Canada Agreement, which replaced the North American Free Trade Agreement.
In a statement, the Bloc Quebecois said it is pleased to see the tariffs have been abandoned, and called for diversification in the sector to mitigate the potential future impact of tariffs.