Mnuchin optimistic on trade battles; Wall Street approves

WASHINGTON (AP) — Treasury Secretary Steven Mnuchin said today the U.S. is making progress on lifting tariffs imposed on steel and aluminum from Canada and Mexico, potentially overcoming a key hurdle toward approval of a trade agreement between the three countries.

Addressing another contentious trade issue, Mnuchin said he expects to soon travel to Beijing with U.S. Trade Representative Robert Lighthizer to resume negotiations on the trade dispute between the U.S. and China.

Mnuchin's positive comments on trade before a Senate Appropriations subcommittee helped reverse early losses on Wall Street. The Dow Jones Industrial Average was up 150 points around 3 p.m.

"I think we are close to an understanding with Mexico and Canada," Mnuchin said in a response to a question on the status of the steel and aluminum tariffs imposed on the two countries.

President Donald Trump last year slapped tariffs on imported steel and aluminum from China and a number of other nations, invoking a rarely used provision of a 1962 law to claim that the foreign metals posed a threat to U.S. national security.

The administration retained the tariffs on Canada and Mexico even after the two countries agreed to Trump's demands to overhaul the North American Free Trade Agreement, which went into effect in 1994. But now removal of those tariffs on the two countries has become a key demand for the administration to win support of the reworked trade agreement.

Markets were also bolstered by reports that the White House plans to delay a decision about imposing tariffs on autos from Europe by up to six months. A decision was due by Saturday.

CNBC, quoting unnamed sources, said that the administration was close to announcing a postponement of the auto tariffs for up to six months. The administration sees the threat of the auto tariffs as a way to gain leverage over trading partners such as the European Union and Japan in ongoing trade talks.

"The case remains clear – cars are not a national security threat," the Alliance of Automobile Manufacturers, an industry trade group, said in a statement. The group said imposing tariffs on imports of autos and auto parts would end up costing as many as 700,000 American jobs.