A top Mexican official has raised hopes for the possibility of the U.S. lifting its steel and aluminum tariffs, a move that would boost President Trump’s U.S.-Mexico-Canada agreement on trade in Congress.

“We are, I think, close to negotiating the lifting of the tariffs. We’re having very fruitful conversations on lifting the tariffs not only in the U.S. but also here in Toronto,” Mexican Economy Minister Graciela Marquez said following a meeting with Canada’s top trade negotiator, Foreign Minister Chrystia Freeland.

To vote for the USMCA deal, which would replace the 1993 North American Free Trade Agreement, several members of Congress are demanding that the U.S. restore exemptions to the 25% tariff on steel and 10% tariff on aluminum that Canada and Mexico previously enjoyed.

The exemptions were initially granted when the tariffs were enacted last year, but removed by the White House during the negotiations on USMCA as a tactic to pressure Canada and Mexico. It was widely assumed by lawmakers and the business community that the exemptions would be restored once a deal was reached between the three countries, but the Trump administration has refused to restore them.

[Read more: Mexico adopts labor reforms, advancing Trump USMCA trade deal]

“If these tariffs aren’t lifted, USMCA is dead,” Senate Finance Committee Chairman Chuck Grassley, R-Iowa, said in a Wall Street Journal op-ed late last month. “There is no appetite in Congress to debate USMCA with these tariffs in place.”

Even if the steel and aluminum tariffs are removed, USMCA faces other challenges in Congress. House Speaker Nancy Pelosi, D-Calif., has yet to schedule a vote and has said the U.S. should re-open negotiations on the deal in order to firm up its enforcement provisions, a move that the U.S., Canada and Mexico all oppose.

https://www.washingtonexaminer.com/policy/economy/mexico-says-deal-may-be-close-on-steel-tariffs-boosting-trump-usmca