“We’re not looking to get into trade wars, we’re looking to make sure that U.S. companies can compete fairly around the world,” Treasury Secretary Steven Mnuchin told House members Tuesday. | Carolyn Kaster/AP Photo Mnuchin: Canada, Mexico likely exempted from tariffs Once a new NAFTA is reached, the trading partners wouldn't be subject to the tariffs, the Treasury secretary tells Congress.

President Donald Trump’s steel and aluminum tariffs may not apply to Canada and Mexico as the U.S. negotiates deals with those countries, Treasury Secretary Steven Mnuchin said Tuesday.

Testifying at a House Appropriations subcommittee hearing, Mnuchin faced increasing opposition from fellow Republicans to the president’s tariff proposals announced last week.


“In the case of Canada and Mexico, our objective is to have a new NAFTA, and once we do that — which I’m cautiously optimistic on — the tariffs won’t apply to them,” Mnuchin told House members.

The three nations in NAFTA wrapped up the seventh round of renegotiation talks on Monday in Mexico City. The talks have been progressing but are taking longer than initially expected.

“As the president just announced, Canada is a very significant partner that buys steel and sells steel,” Mnuchin said. “To the extent that we’re successful in renegotiating NAFTA, those tariffs won’t apply to Mexico and Canada."

When he was asked directly if Canada would be exempted from the aluminum and steel tariffs, Mnuchin reiterated that Trump would be announcing the specifics later this week.

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On Monday night, Trump spoke with Canadian Prime Minister Justin Trudeau about NAFTA, and the White House said Trump supports an agreement that is “fair to all three countries,” but the current deal leaves the U.S. with a “trade deficit.” Trump had also tweeted Monday morning that the "Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed."

Trump has proposed tariffs of 25 percent on steel imports and 10 percent on aluminum, angering many U.S. allies and frustrating even some members of his own political party. The head of the Organization for Economic Cooperation and Development said Tuesday that Trump and other world leaders should use a global forum to tackle steel excess capacity rather than imposing tariffs.

Mnuchin also took blows from Republicans who questioned whether the president understood what he was doing with the tariffs.

“We’re not looking to get into trade wars; we’re looking to make sure that U.S. companies can compete fairly around the world,” Mnuchin told House members.

However, many close trading partners, including the European Union, have promised swift retaliatory measures if Trump imposes the tariffs on their nations.

Mexico's top trade negotiator reiterated Tuesday that his nation would retaliate if the tariffs were imposed on it. The U.S. "is going to shoot themselves in the foot," Mexican Economy Minister Ildefonso Guajardo said on Mexican network Noticieros Televisa. "We're bound — if they do it, we're going to respond."

Victoria Guida contributed to this report.

