Canadian Foreign Minister Chrystia Freeland was in Washington for talks with US Trade Representative Robert Lighthizer and congressional leaders

Washington (AFP) - US Treasury Secretary Steven Mnuchin said Wednesday that Washington was close to resolving its differences with Mexico and Canada over steel and aluminum tariffs that have created friction among the trading partners.

The steep US tariffs imposed last year on national security grounds have become a major stumbling block to ratifying a new North American trade pact negotiated last year by the three countries.

Mnuchin’s comments came as visiting Canadian Foreign Minister Chrystia Freeland again warned that Canada was unlikely to ratify the United States-Mexico-Canada agreement so long as the tariffs – 25 percent on steel and 10 percent on aluminum – remained in place.

In his testimony before a Senate committee, Mnuchin said: “I think we are close to an understanding with Mexico and Canada.”

Lawmakers on Capitol Hill have resisted bringing the new agreement to a vote while the tariffs remain in place for the US’s northern and southern neighbors, traditionally major US suppliers of steel and aluminum.

Democrats and their supporters have expressed skepticism about Mexico’s commitment to greater labor rights protections.

Powerful players in the Senate and House offered few details on Wednesday about efforts to end the impasse.

“We won’t know for a few days,” Iowa Republican Chuck Grassley, chairman of Senate Finance Committee and an opponent of the metal tariffs, told reporters.

But Freeland told reporters that ratifying the USMCA would be “very, very problematic” so long as the tariffs remained in place.

“We believe that these tariffs need to be lifted,” she said, calling the levies “hurtful to each of our countries.”

US officials have reportedly sought to persuade Mexico City and Ottawa to accept export quotas in return for lifting the metal tariffs on their countries.

Mnuchin said Wednesday the issue was likely to be worked out soon, but did not offer any details.

“I’ve spoken to the finance ministers,” he said in testimony. “I can assure you it is a priority for us.”

Lighthizer also met Wednesday with lawmakers including Democratic House Speaker Nancy Pelosi.

Following the meeting, Democrat Richard Neal, chairman of the House Ways and Means Committee – which will be key to the agreement’s ratification through US legislation – told reporters that members of his party would confer to consider their position.

“We made a series of suggestions in there acknowledging that there have been improvements but we also think that there’s a ways to go,” Neal said.

- China talks in ‘near future’ -

Mnuchin also repeated his expectation that US negotiators would return to Beijing to pursue stalled talks aimed at resolving the US-China trade war.

US Treasury Secretary Steven Mnuchin said the US is close to an "understanding" with Canada and Mexico on steel and aluminum tariffs

With Lighthizer, Mnuchin has led the US delegation in 11 rounds of shuttle diplomacy aimed at resolving the trade dispute between the world’s two biggest economies.

But hostilities resumed last week when the United States accused China of backsliding on major commitments, and President Donald Trump more than doubled punitive tariffs on $200 billion worth of Chinese merchandise imports.

China responded in kind on Monday, raising duties on $60 billion in US exports.

“I think we had a constructive meeting with the vice premier,” Mnuchin told lawmakers Wednesday, referring to last week’s brief sessions with Chinese trade envoy Liu He.

“There’s still a lot of work to do,” he added. “As I’ve said, my expectation is we will most likely go to Beijing at some point in the near future to continue those discussions and I think it’s President Trump’s expectation to meet with President Xi at the G20 at the end of June.”