A senior economist at BMO believes there's a 'reasonable chance' that steel and aluminum tariffs will be lifted once a new trade agreement is in place.
Sal Guatierri made the comments before a breakfast seminar in Windsor Tuesday of the Canadian Tooling and Machining Association attended by about 90 local machine, tool and die and mould sector business leaders.
The new USMCA will be signed by the three leaders on Friday and Guatierri believes it will get the ball rolling to improve relations between the three countries.
"Just in the spirit of the overall trade agreement because remember what does the USMCA give all three countries, basically tariff free access to sell goods between the three countries," says Guatierri.
The tariffs were imposed by the Trump government in 2018 which prompted Canada to impose retaliatory tariffs on steel and aluminum this past summer.
If the tariffs are lifted, Guatierri expects it will be in 2019.
But he warns the U.S will likely impose quotas or limits on imports to the U.S.
"The concern that the U.S would have if they lifted the tariffs on Canada and Mexico, is that those two countries [Canada and Mexico] would be used as a backdoor for steel and aluminum from Asia down to those two countries, down to the U.S."
As for the USMCA, he believes Canada dodged a bullet in the auto industry with the threat of a 25% tariff on Canadian auto shipments to the U.S which he says would have devastated the Canadian auto industry.
Under the new agreement, 75% of a vehicle must be produced in North America, up from the current 62.5%.