Why in News:

• The Trump administration reached an agreement with Canada and Mexico to lift tariffs on metal imports, resolving a yearlong standoff that inflamed North Atlantic tensions and complicated efforts to ratify a revised trade deal.

Background:

• As part of the agreement, both Mexico and Canada agreed to lift retaliatory tariffs on American products.
• Instead of tariffs, the nations would set up a system for monitoring and enforcement in case of import surges into the United States.
• The United States, Canada and Mexico signed that trade deal, the successor to the North American Free Trade Agreement.
• American lawmakers of both parties, as well as Canada and Mexico, had insisted that tariffs on steel and aluminum must be lifted before votes would be held. Lawmakers have argued that the tariffs, while aimed at other countries, hurt American companies and consumers by raising prices for products that use imported steel and aluminum.
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• Even with an agreement to resolve metal tariffs, the North American pact still faces potential opposition from congressional Democrats. The American tariffs were particularly punishing to Canada because it buys more American steel than any other country, according to the Canadian government. while nearly 90 percent of Canadian steel and aluminum exports go to the United States.
• In 2017, the Canadian steel industry employed more than 23,000 Canadians and the aluminum industry about 10,500 workers.
• After the imposition of the duties, some economists predicted it could cost the Canadian economy more than $3 billion Canadian dollars annually.

What are the implications for India?

• The protectionist measure by the US and potential counter-measures by other countries might hurt the steel industry globally.
• This might put downward pressure on steel and aluminium prices.
• This is a cause of worry for Indian metal companies as manufacturers have to look for
  newer markets. Indian metal producers with exposure to Europe and the United States already warned of increased costs and lower sales.
• This might affect the recent recovery in the volume growth and profitability of metal
  producers. A downward pressure on the stock price of metal companies would also make it tough to raise fresh equity capital for debt-repayment or capacity expansion.