Mexico adopts firm stance on auto dispute ahead of U.S. talks

By Sharay Angulo

MEXICO CITY (Reuters) -Mexico expects the United States to comply with automotive rules in the new North American trade pact, a senior official said, taking a firm line ahead of high-level talks next week clouded by a dispute over the future of the car industry in the region.

Mexico and Canada have been at odds for months with the United States over the application of regional content requirements for the auto industry, one of the cornerstones of last year’s United States-Mexico-Canada Agreement (USMCA) trade pact.

The two countries favor a more flexible interpretation of the rules than the one taken by U.S. officials.

When asked late on Thursday whether a new methodology could be used to avoid taking the row to an international tribunal, Deputy Economy Minister Luz Maria de la Mora told Reuters: “No, because we’re not renegotiating (USMCA). It’s about honoring what was agreed in the treaty.”

“The text of the agreement made very clear what scope for flexibility there was in the deal,” she added, noting that differences between the United States and Mexico on the issue had begun while the Trump administration was still in office.

Under USMCA, which replaced the 1994 North American Free Trade Agreement (NAFTA), carmakers must meet a 75% threshold for North American content for vehicles in order to qualify for tariff-free trade within the region.

With NAFTA, which former U.S. President Donald Trump had decried as a “disaster” for U.S. industry, the content threshold stood at 62.5%.

Top U.S. and Mexican officials are due to restart the so-called high level economic dialogue on Sept. 9 in Washington, talks that were suspended during Trump’s time in office.

Mexican Economy Minister Tatiana Clouthier will be among the participants at the dialogue, which Mexico’s government said is in part aimed at deepening economic integration.

On Aug. 20, Mexico requested formal consultations over the interpretation and application of the stricter automotive content rules, but de la Mora said these had not yet begun.

Making the rules tougher than what was agreed under USMCA risked backfiring on the industry, reducing competitiveness, raising costs and making the region “less attractive for investment and production,” de la Mora said.

She added that disputes over content requirements only fanned uncertainty and could even end up benefiting suppliers from other parts of the world with laxer rules like South Korea.

Nevertheless, earlier this week, President Andres Manuel Lopez Obrador said he did not expect the dispute to end up before an international tribunal, and expressed optimism that agreement could be reached before long.

(Reporting by Sharay AnguloEditing by Chizu Nomiyama and Frances Kerry)

U.S. House passes new North American trade deal replacing NAFTA

By David Lawder

WASHINGTON (Reuters) – The U.S. House of Representatives overwhelmingly approved a new North American trade deal on Thursday that includes tougher labor and automotive content rules but leaves $1.2 trillion in annual U.S.-Mexico-Canada trade flows largely unchanged.

The House passed legislation to implement the U.S.-Mexico Canada Agreement 385-41, with 38 Democrats, two Republicans and one independent member voting no.

The bipartisan vote contrasted sharply with Wednesday night’s Democrat-only vote to impeach U.S. President Donald Trump. [nL1N28S09W]

The House vote sends the measure to the Senate, but it is unclear when the Republican-controlled chamber will take it up. Senate Republican leader Mitch McConnell has said that consideration of the measure would likely follow an impeachment trial in the Senate, expected in January.

The USMCA trade pact, first agreed upon in September 2018, will replace the 1994 North American Free Trade Agreement. Trump vowed for years to quit or renegotiate NAFTA, which he blames for the loss of millions of U.S. factory jobs to low-wage Mexico.

House Speaker Nancy Pelosi gave USMCA a green light last week after striking a deal with the Trump administration, Canada and Mexico to strengthen labor enforcement provisions and eliminate some drug patent protections.

Pelosi said she was not concerned about Democrats handing Trump a political victory on USMCA as they are trying to remove him from office.

“It would be a collateral benefit if we can come together to support America’s working families, and if the president wants to take credit, so be it,” Pelosi said during House floor debate before the vote.


The changes negotiated by Democrats, which include tighter environmental rules, will also set up a mechanism to quickly investigate labor rights abuses at Mexican factories. They have earned the support of several U.S. labor unions that have opposed NAFTA for decades.

U.S. Trade Representative Robert Lighthizer made a concession by dropping a requirement for 10 years of data exclusivity for biologic drugs, a provision that Democrats feared would keep drug prices high and that they called a “giveaway” to big drugmakers.

Some of the most ardent trade skeptics in Congress have voiced support of the deal, including Representative Debbie Dingell, who represents an autoworker-heavy district in southeastern Michigan. Dingell said in television interviews that she backed the bill, even though she was skeptical it would bring auto jobs back to Michigan.

Representative Ron Kind, a pro-trade Democrat from Wisconsin, one of the top dairy-producing states, praised new access to Canada’s closed dairy market under USMCA.

“A no vote is a return to the failed policy of the old NAFTA, the status quo, rather than this more modernized version,” Kind said in floor debate.


The agreement modernizes NAFTA, adding language that preserves the U.S. model for internet, digital services and e-commerce development, industries that did not exist when NAFTA was negotiated in the early 1990s. It eliminates some food safety barriers to U.S. farm products and contains language prohibiting currency manipulation for the first time in a trade agreement.

But the biggest changes require increased North American content in cars and trucks built in the region, to 75% from 62.5% in NAFTA, with new mandates to use North American steel and aluminum.

In addition, 40% to 45% of vehicle content must come from high-wage areas paying more than $16 an hour – namely the United States and Canada. Some vehicles assembled in Mexico mainly with components from Mexico and outside the region may not qualify for U.S. tariff-free access.

The U.S. Congressional Budget Office estimated earlier this week that automakers will pay nearly $3 billion more in tariffs over the next decade for cars and parts that will not meet the higher regional content rules.

(Reporting by David Lawder in Washington; Additional reporting by Andrea Shalal in Washington and David Ljunggren in Ottawa; Editing by Matthew Lewis and Leslie Adler)

U.S., Canada, Mexico sign trade deal after last-minute brinkmanship

U.S. President Donald Trump, Canada's Prime Minister Justin Trudeau and Mexico's President Enrique Pena Nieto attend the USMCA signing ceremony before the G20 leaders summit in Buenos Aires, Argentina November 30, 2018. REUTERS/Kevin Lamarque

By Roberta Rampton

BUENOS AIRES (Reuters) – The leaders of Mexico, Canada and the United States signed a North American trade pact on Friday after brinkmanship over the final details of the deal continued through the eve of the signing.

They agreed on a deal in principle to govern the more than trillion dollars of mutual trade after a year and a half of acrimonious negotiations concluded with a late-night bargain just an hour before a deadline on Sept. 30.

Since then, the three sides have bickered over the wording and the finer points of the deal and still had not agreed just hours before officials were due to sit down and sign it as the G20 summit kicks off in Buenos Aires.

Legislators from the three countries still have to approve the pact, officially known as the United States-Mexico-Canada Agreement (USMCA), before it goes into effect and replaces the North American Free Trade Agreement (NAFTA).

Canadian Prime Minister Justin Trudeau’s spokesman only confirmed his attendance late on Thursday. Before signing the deal he continued to refer to as “the New NAFTA,” Trudeau told Trump the two should continue to work together to eliminate steel and aluminum tariffs.

Mexico’s President Enrique Pena Nieto joined the ceremony on his last day in office.

Trump had vowed to revamp NAFTA during his 2016 presidential election campaign. He threatened to tear it up and withdraw the U.S. completely at times during the negotiation, which would have left trade between the three neighbors in disarray.

Trump forced Canada and Mexico to renegotiate the 24-year-old agreement because he said the existing pact encouraged U.S. companies to move jobs to low-wage Mexico.

U.S. objections to Canada’s protected internal market for dairy products was a major challenge facing negotiators during the talks, and Trump repeatedly demanded concessions and accused Canada of hurting U.S. farmers.

A side letter to the September agreement showed that Trump preserved the ability to impose threatened 25 percent global tariffs on autos while largely exempting passenger vehicles, pickup trucks and auto parts from Canada and Mexico.

(Reporting by Roberta Rampton and Caroline Stauffer in Buenos Aires and David Ljunggren in Ottawa; Editing by Lisa Shumaker and Chizu Nomiyama)

Trump cites ‘historic’ trade pact with Canada, Mexico

FILE PHOTO: Flags of the U.S., Canada and Mexico fly next to each other in Detroit, Michigan, U.S. August 29, 2018. REUTERS/Rebecca Cook/File Photo

By Susan Heavey

WASHINGTON (Reuters) – U.S. President Donald Trump on Monday took credit for salvaging a trilateral free trade accord with Canada and Mexico, marking it as a victory in his campaign to reshape global commerce as financial markets breathed a sigh of relief.

The deal, announced on Sunday, is a reworking of the 1994 North American Free Trade Agreement, which underpins $1.2 trillion in trade between the three countries. Trump had described NAFTA as a bad deal for Americans and threatened to eliminate it as part of his “America First” agenda.

The new United States-Mexico-Canada Agreement (USMCA) is aimed at bringing more jobs into the United States, with Canada and Mexico accepting more restrictive commerce with the United States, their main export partner.

While changing NAFTA and bringing down U.S. trade deficits was a top Trump campaign pledge, Sunday’s agreement largely leaves the broader deal intact and maintains supply chains that would have been fractured under weaker bilateral deals.

U.S., Canadian and Mexican stocks were trading higher on Monday, with the benchmark S&P 500 index.SPX rising more than 0.7 percent and the Toronto Stock Exchange’s S&P/TSX index. GSPTS gaining about 0.4 percent.

The Canadian dollar CAD strengthened to a four-month high against the U.S. dollar, while the Mexican peso rose to near a two-month high against the greenback before paring some gains.

Trump, who is scheduled to make a statement at 11 a.m. EDT (1500 GMT), on Twitter called the agreement with the United States’ northern neighbor “wonderful” and “a historic transaction.”

“It is a great deal for all three countries, solves the many deficiencies and mistakes in NAFTA, greatly opens markets to our Farmers and Manufacturers, reduce Trade Barriers to the U.S. and will bring all three Great Nations closer together in competition with the rest of the world,” Trump wrote.

Canadian Prime Minister Justin Trudeau on Sunday called it “a good day for Canada” after negotiators worked frantically ahead of the U.S.-imposed midnight deadline. He is scheduled to speak to reporters at noon EDT (1600 GMT).

The pact preserved a key trade dispute settlement mechanism sought by Canada even as Ottawa agreed to open up its dairy markets to U.S. farmers.

The deal effectively maintains the current auto sector and largely spares Canada and Mexico from the prospect of U.S. tariffs on their vehicles, although it will make it harder for global automakers to build cars cheaply in Mexico.

Trump vowed during his 2016 presidential campaign to tear up current U.S. trade deals, which he blamed for a loss of American manufacturing jobs. His administration has abandoned other trade accords and slapped tariffs on a number of key trading partners, including China.

“It’s a promise made, promise kept,” Peter Navarro, the White House trade adviser, told Fox News on Monday. “NAFTA is dead. We have USMCA.”

U.S. President Donald Trump takes a question from a New York Times reporter during a news conference on the sidelines of the 73rd session of the United Nations General Assembly in New York, U.S., September 26, 2018. REUTERS/Carlos Barria

U.S. President Donald Trump takes a question from a New York Times reporter during a news conference on the sidelines of the 73rd session of the United Nations General Assembly in New York, U.S., September 26, 2018. REUTERS/Carlos Barria


Mexican Economy Minister Ildefonso Guajardo on Monday said the new accord could be signed by the three countries’ leaders when they meet at a G20 summit in Buenos Aires in late November.

The deal does not include any changes to separate U.S. tariffs on steel and aluminum levied on a number of Washington’s trading partners, including Canada, Mexico, China and the European Union.

Mexican Foreign Minister Luis Videgaray on Monday said he hoped concerns over the metals tariffs could be resolved before the new trilateral deal is signed.

Navarro, in his interview with Fox, said the two trade issues were separate.

U.S. officials intend to sign the new trilateral deal by Nov. 30, Navarro said. It would then be submitted for approval by the U.S. Congress, currently controlled by Trump’s fellow Republicans.

U.S. Senator Pat Roberts, a Kansas Republican who oversees the Senate’s agricultural committee, said he was “eager to review the details” of the deal and noted the outsized role trade with Canada and Mexico had on rural U.S. states like his.

U.S. Senator Joni Ernst of Iowa, a top farming state, praised the agreement in a tweet on Monday: “Our farmers need stability and access to markets.”

Democratic U.S. Senator Amy Klobuchar of Minnesota, which borders Canada, also said she would review the terms and was glad her state’s “number one trading partner” was “back in the mix.”

The United States and Mexico clinched a bilateral agreement in late August after the Trump administration sought separate lines of talks, leaving Canada to negotiate its own terms.

A senior source close to the trade talks said Mexico’s Videgaray, Trudeau’s chief of staff Katie Telford and White House adviser Jared Kushner helped over the weekend to facilitate Sunday’s agreement. Advisers to Mexico’s incoming government, Marcelo Ebrard and Jesus Seade, were also consulted “in real time,” the source said.

(Reporting by Susan Heavey; Additional reporting by Lisa Lambert in Washington and Frank Jack Daniel in Mexico City; Editing by Franklin Paul and Paul Simao)

Canada optimistic NAFTA deal can be struck this month: source

FILE PHOTO: Canadian Foreign Minister Chrystia Freeland takes part in a news conference at the Embassy of Canada in Washington, U.S., August 31, 2018. REUTERS/Chris Wattie/File Photo

By David Ljunggren

WASHINGTON (Reuters) – Canada is increasingly optimistic it can reach a deal with the United States to salvage the North American Free Trade Agreement, although it may take until the end of September, a source with direct knowledge of the talks said on Friday.

U.S. and Canadian officials resumed their negotiations this week to modernize the 1994 pact, which governs $1.2 trillion a year in trade between the United States, Canada and Mexico and supports hundreds of thousands of jobs.

President Donald Trump has struck a trade deal with Mexico and threatened to push ahead without Canada, a move that would kill NAFTA.

The talks in Washington are focused on Canada’s dairy supply system, which the United States says hurts its exports, Ottawa’s desire to keep NAFTA’s Chapter 19 dispute resolution mechanism and Canadian media laws that favor domestically produced content.

The Canadian source, who declined to be named given the sensitivity of the situation, said Canadian negotiators thought it was quite possible the talks would continue until the end of this month.

A U.S. official told Reuters on Thursday that Canada needed to move further on dairy. In its recent trade deal with the European Union, Canada made concessions on dairy imports.

“We’re down to three issues: Chapter 19, the cultural issues and dairy. We’ve created leverage and driven Canada to the table,” the U.S. official said. “Part of our problem is that Canada has been backsliding on its commitments (on dairy).”

Trump has targeted what he sees as “unfair” trade as part of his “America First” agenda to boost U.S. manufacturing and jobs, imposing tariffs on trading partners, including Canada, China, the EU and Mexico. That has prompted retaliation.

Tens of billions of dollars in Chinese imports have been slapped with U.S. tariffs and a new round of duties are due to be triggered soon.

Both Canada and Mexico want Trump to agree to permanently exempt them from U.S. tariffs on steel and aluminum imports. Washington has used those tariffs as leverage in the NAFTA talks.

Canada has used the provisions of NAFTA’s dispute resolution mechanism to defend its lumber exports to the United States. Washington charges that Canadian lumber unfairly undercuts prices on U.S. lumber.


Trump appeared to set a deadline for a deal this week, prompting aides to U.S. Trade Representative Robert Lighthizer and Canadian Foreign Minister Chrystia Freeland to work well into the evening on Thursday to find ways to move forward.

The Republican chairman of the U.S. House of Representatives Ways and Means Committee, Kevin Brady, a powerful voice in Congress on trade, told reporters differences remained between the two sides over Canada’s dairy quota regime, a trade dispute resolution settlement procedure and “other longstanding issues.”

“My sense is that everyone is at the table with the intention of working these last, always difficult issues out,” Brady told reporters after speaking with Lighthizer on Thursday.

Trump has notified Congress he intends to sign the trade deal reached last week with Mexico by the end of November, and officials said the text would be published by around Oct. 1.

Negotiators have blown through several deadlines since the talks started in August 2017. As the process grinds on, some in Washington insist Trump cannot pull out of NAFTA without the approval of Congress.

(Writing by David Chance; Editing by Paul Simao)

Canada, U.S. resume NAFTA talks amid growing optimism

FILE PHOTO: Chevrolet Equinox SUVs are parked awaiting shipment by CN Rail next to the General Motors Co (GM) CAMI assembly plant in Ingersoll, Ontario, Canada October 13, 2017. REUTERS/Chris Helgren/File Photo

By Julie Gordon and Sharay Angulo

WASHINGTON (Reuters) – Canada has three days to tackle contentious issues when it resumes talks with the United States on Wednesday to salvage the trilateral North American Free Trade Agreement amid signs Ottawa was open to taking a more conciliatory approach.

After more than a year of talks, Mexico and the United States announced a bilateral deal on Monday, clearing the way for Canada to rejoin talks to update 24-year-old NAFTA which accounts for over $1 trillion in annual trade between the three nations.

But despite obstacles, Canada and the United States could reach an in-principle deal by the Friday deadline.

“We are optimistic about having some very good, productive conversations this week,” Canadian Foreign Minister Chrystia Freeland said on Wednesday told reporters as she entered the U.S. Trade Representative’s Office.

Freeland said on Tuesday that Mexico’s concessions on auto rules of origin and labor rights were a breakthrough.

Ottawa is also ready to make concessions on Canada’s protected dairy market in a bid to save a dispute-settlement system, The Globe and Mail reported late on Tuesday.

“We’re hearing that there’s a lot of progress being made and that it’s possible that … we’ll be able to see something sometime soon,” Kevin Hassett, Chairman of the White House Council of Economics Advisers, told Fox Business Network on Wednesday.

“Absolutely, the Friday deadline is a real thing … and we hope that Canada will be part of that,” Hassett said.

The three countries are aiming to seal a trade pact by Friday to allow Mexican President Enrique Pena Nieto to sign it before he leaves office at the end of November. The timeline accommodates a 90-day waiting period under U.S. trade law before President Donald Trump can sign the pact.

Republicans also face mid-term elections in November and Prime Minister Justin Trudeau a national one expected by October 2019.

After being sidelined from the talks for more than two months, Freeland will be under pressure to accept terms the United States and Mexico worked out. The U.S. Congress also wants a deal that includes Canada.

“The fact that agreement on those difficult issues for Mexico was able to be reached definitely clears the way for us to have significant, substantive, and I hope productive, conversations with the U.S. this week,” Freeland said after a brief meeting with U.S. Trade Representative Robert Lighthizer.



Freeland dodged questions on Tuesday on what points Canada would be willing to concede on, noting that Ottawa’s key issues are well known.

U.S. President Donald Trump warned he could proceed with a deal with Mexico alone and levy tariffs on Canada if it does not come on board with the revised trade terms.

One of the issues for Canada in the revised deal is the U.S. effort to dump the Chapter 19 dispute resolution mechanism that hinders the United States from pursuing anti-dumping and anti-subsidy cases. Lighthizer said on Monday that Mexico had agreed to eliminate the mechanism.

To save that mechanism, Ottawa plans to change one rule that effectively blocked American farmers from exporting ultrafiltered milk, an ingredient in cheesemaking, to Canada, the Globe and Mail reported, citing sources.

Canadian government officials were not available for an immediate comment on Wednesday. On Tuesday, Trudeau said he would defend Canada’s dairy farmers.

Other hurdles include intellectual property rights and extensions of copyright protections to 75 years from 50, a higher threshold than Canada has previously supported.

“I think that what they probably need by Friday is some indication from Canada to the Americans that it’s ready to play ball, that they’re ready to negotiate in good faith,” said Mark Warner, a trade lawyer with MAAW Law, which specializes in Canadian and U.S. law.

“If Chrystia Freeland goes down there and she starts going on and on about red lines again, then I think it’s all over,” he added.

(Reporting by Julie Gordon and Sharay Angulo; Additional reporting by Susan Harvey, Donia Chiacu, David Lawder and Makini Brice; Writing by Denny Thomas; Editing by Lisa Shumaker and Susan Thomas)

Mexican leftist’s adviser seeks to calm nerves before vote

FILE PHOTO: Mexico's presidential front-runner Andres Manuel Lopez Obrador of the National Regeneration Movement (MORENA) addresses supporters in Oaxaca, Mexico June 16, 2018. REUTERS/Jorge Luis Plata

By Dave Graham

MEXICO CITY (Reuters) – Leading presidential candidate Andres Manuel Lopez Obrador would seek to increase investor confidence in Mexico to strengthen the peso and could hold auctions of oil rights, a top adviser said on Monday, striking a moderate tone days before the election.

Leftist Lopez Obrador is leading ahead of Sunday’s vote and Alfonso Romo, his top business adviser, told reporters a Lopez Obrador government will do everything it can – short of intervention – to help the peso.

Romo, Lopez Obrador’s nominee for chief of staff, said his government would seek to strengthen the rule of law and create business conditions that would give investors confidence in order to support the Mexican currency.

He echoed other advisers, saying Lopez Obrador would respect the independence of the central bank.

Mexico’s peso sank to a 1-1/2 year low this month, hit by a broad dollar rally, a deadlock in talks to rework the NAFTA trade deal and nervousness ahead of the election.

Lopez Obrador, 64, is an anti-system third-time presidential candidate who promises to clean up corruption. Some of his proposals, such as suspending oil auctions, have unnerved investors.

The former Mexico City mayor holds a commanding double-digit lead in all major opinion polls, although one survey on Monday showed his lead narrowing slightly, to 12 points.

Romo sought to calm any jitters on Monday, saying there could be more auctions of oil drilling rights as long as a review of contracts that have already been awarded to private companies showed no problems.

“We will revise them and everything good will remain,” he said, noting Lopez Obrador had taken the same message to investors in New York.

Romo said such a review should be finished quickly, ideally by October, during the transition period before Mexico’s next president takes office in December.

Romo said he felt “at ease” with what he had reviewed so far regarding the landmark energy opening under current President Enrique Pena Nieto.

(Reporting by Dave Graham; Writing by Michael O’Boyle; Editing by Frank Jack Daniel and Dan Grebler)

Trump threatens aid for Honduras, other nations over ‘caravan’

U.S. President Donald Trump arrives for the Easter service at Bethesda-by-the-Sea Episcopal Church in Palm Beach, Florida, U.S., April 1, 2018. REUTERS/Yuri Gripas

WASHINGTON (Reuters) – President Donald Trump said on Tuesday U.S. foreign aid to Honduras and other countries was at risk unless they stop a so-called caravan of more than 1,200 Central American migrants headed to the U.S. border with Mexico.

Trump’s latest salvo against the migrants’ journey comes as the president has stepped up his immigration rhetoric in recent days and his administration has moved to further crack down on people who are in the United States illegally.

The migrants’ 2,000-mile (3,200-km) journey from the Mexico-Guatemalan border is expected to end at the U.S. border. Mexico’s government has said such caravans of mostly Central Americans, including many escaping violence in Honduras, have occurred since 2010.

Trump has already blasted Mexico and threatened to upend the North American Free Trade Agreement (NAFTA) over the caravan, and on Tuesday also raised the prospect of withholding U.S. assistance. The current trip has also put pressure on Mexican authorities ahead of the July 1 presidential election there.

“The big Caravan of People from Honduras, now coming across Mexico and heading to our ‘Weak Laws’ Border, had better be stopped before it gets there. Cash cow NAFTA is in play, as is foreign aid to Honduras and the countries that allow this to happen. Congress MUST ACT NOW!” Trump wrote in an early morning post on Twitter.

On Monday, the Republican president railed against Democrats over immigration and again pressed U.S. lawmakers to pass legislation to build his long-promised border wall between the United States and Mexico.

Despite months of efforts, no immigration deal has emerged in the Republican-led Congress, where lawmakers are not expected to pass much major legislation ahead of November’s midterm congressional elections.

(Writing by Susan Heavey; Editing by Frances Kerry)

Trump sets metals tariffs but exempts Canada and Mexico

FILE PHOTO: Rolled steel are seen at a Hyundai Steel plant in Dangjin, about 130 km (81 miles) southwest of Seoul June 15, 2011. REUTERS/Lee Jae-Won/File Photo

By David Lawder, Antonio De la Jara and Dave Sherwood

WASHINGTON/SANTIAGO (Reuters) – President Donald Trump pressed ahead with the imposition of 25 percent tariffs on steel imports and 10 percent on aluminum on Thursday but exempted Canada and Mexico, backtracking from earlier pledges of tariffs on all countries.

Details of the plan came from a briefing by administration officials ahead of Trump’s speech, which had been due to start at 3:30 p.m. (2030 GMT). Trump will say that other countries can apply for exemptions, according to the administration, although details of when they would be granted were thin.

Trump has offered relief from steel and aluminum tariffs to countries that “treat us fairly on trade,” a gesture aimed at putting pressure on Canada and Mexico to give ground in separate talks on the North American Free Trade Agreement (NAFTA), which appear to be stalled.

Trump has also demanded concession from the European Union, complaining that it treated American cars unfairly and has threatened to hike tariffs on auto imports from Europe.

Stock markets in Canada and Mexico rallied on the news, as did the Canadian dollar and the Mexican peso.

There was no mention of Mexico and Canada giving ground on NAFTA in the proposals.

Trump’s tariffs have triggered the threat of countermeasures from the European Union and now China. The levies aim to hit Beijing, although China exports very little of either metal to the United States.

(Additional reporting by Michael Martina, Elias Glenn, Kim Coghill, Brian Love, Nichola Saminather, Doina Chiacu and Andrea Hopkins; writing by David Stamp and David Chance; editing by Jonathan Oatis and Frances Kerry)

Canada criticizes U.S. lumber duties put in place on Wednesday

A log driver works a barge of Canadian logs at Squamish Mills Ltd in Howe Sound near Squamish, British Columbia, Canada, April 25, 2017.

WINNIPEG, Manitoba (Reuters) – The Canadian government on Wednesday criticized the United States for a decision to impose duties on certain softwood lumber exports and underlined its determination to fight the move.

The duties, which went into effect on Wednesday, are “unfair, unwarranted and troubling,” Foreign Minister Chrystia Freeland said in a statement.

Ottawa has already launched challenges against the duties – which range from about 10 percent to nearly 24 percent, below a preliminary range of about 17 percent to 31 percent – with the World Trade Organization and through NAFTA.

The U.S. Commerce Department’s decision will impose anti-dumping and anti-subsidy duties affecting about $5.66 billion worth of lumber and comes amid increasingly acrimonious talks on renegotiating NAFTA, the trilateral trade pact between the United States, Canada and Mexico.

Joe Patton, U.S. Lumber Coalition Co‐Chair and Vice President of Wood Products at The Westervelt Company, defended the duties.

“These duties are a fair enforcement of U.S. trade law. For decades, the Canadian government has abused the law and provided massive subsidies to its lumber industry, harming U.S. producers and workers,” he said on Wednesday.

The decision to impose tariffs followed failed talks to end the decades-long dispute between the two countries. The row centers on the fees paid by Canadian lumber mills for timber cut largely from government-owned land. Those fees are lower than fees paid on U.S. timber, which comes largely from private land.

The U.S. Commerce Department accuses Canada of unfairly subsidizing and dumping softwood lumber, which is commonly used in the construction of homes. Canada denies it is dumping the lumber.

The US Dept of Commerce was not immediately available for comment on Wednesday.

(Reporting by Rod Nickel in Winnipeg, Manitoba; and David Ljunggren in Ottawa; writing by Sue Thomas; Additional reporting by Lesley Wroughton in Washington; Editing by Chizu Nomiyama and Jim Finkle)