This article is more than 1 year old

This article is more than 1 year old

The Trump administration moved to cool the simmering trade war with its major trading partners on Friday, ending tariffs on metal imports from Canada and Mexico and announcing a pause on planned tariffs on cars and car parts.

“I’m pleased to announce we’ve just reached agreement with Canada and Mexico,” Donald Trump said. “We’ll be selling our product into those countries without the imposition of tariffs.”

The US imposed tariffs on steel and aluminium last March, arguing cheap imports were an “assault on our country” that was leading to the “decimation of entire communities”.

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The tariffs have sparked the largest trade war in a generation and set the US against all its major trading partners including the European Union, China, Canada and Mexico.

In a statement, the Canadian government said agreement had been reached for US tariffs to be lifted on Canadian steel and aluminium imports. Retaliatory tariffs imposed on American products will be lifted by Sunday.

The Canadian prime minister, Justin Trudeau, said the move should clear the way for the ratification of the United States Mexico Canada Agreement (USMCA) reached late last year, which replaces the North American Free Trade Agreement (Nafta).

“We are very optimistic we will be able to move forward in coming weeks,” he said, calling the deal was “a huge step forward”.

On Friday the Trump administration also announced it had paused a plan to impose tariffs on automobiles and auto parts from the EU and Japan. Those tariffs were set to be imposed this weekend but will now be put on hold for 180 days while talks continue.

While Friday’s news appeared to signal a breakthrough, China and the US are still locked in an escalating trade war. CNBC reported on Friday that the next round of US-China negotiations were “in flux”, with both sides refusing to compromise.

US markets have wobbled wildly in the wake of trade news. On Friday all the major US markets ended down – the second straight week of losses.