Washington, May 18 (IANS): US President Donald Trump has agreed to lift tariffs on metal imports from Canada and Mexico, that in exchange agreed to stop punishing American farmers with their own taxes on pork, cheese and milk.

At the same time, he postponed a decision on Friday on whether to impose tariffs on automobiles imported from Europe, Japan and other countries for six months, setting a tight deadline for Washington to reach trade deals that have so far proved elusive, the New York Times reported.

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

The US trade representative said in a statement that the metal tariffs would be removed and both Mexico and Canada "had agreed on the removal of all retaliatory tariffs imposed on American goods by those countries".

The metal tariffs are linked to a broader free trade deal, the US-Mexico-Canada Agreement, which was signed in 2018. It replaced the North American Free Trade Agreement.

Trump had described the tariffs as a source of leverage in negotiating a revision to that deal, which has yet to be ratified by legislatures in all three countries.

According to the daily, Trump's decision removes the threat of an all-encompassing global trade war and allows him to focus on pushing China to agree to Washington's trade terms as well as pressuring Europe and Japan to reach a trade deal before the 2020 election.

As the White House eased tensions with Canada and Mexico, it continued to pressure allies elsewhere, including Europe and Japan. Those governments are still not exempt from the steel and aluminium tariffs and they are likely to bear the brunt of auto tariffs that could reach 25 per cent, if Trump opts to impose them.

The White House's announcement of a delay in determining whether to impose levies on foreign automobiles gave a temporary reprieve to global automakers and auto suppliers, which had been bracing for punishing tariffs on millions of cars imported into the US each year.

But it also set up a tense six-month period for the White House to reach trade deals with Japan, Europe and other nations that have already been complicated by mistrust and disagreements.

The White House said that Trump "took historic action" in issuing a proclamation that directs US Trade Representative Robert Lighthizer to negotiate agreements to address a national security threat that is causing harm to the American automobile industry.

In a statement, Toyota called the White House's announcement "a major setback for American consumers, workers and the auto industry," saying that it "sends a message to Toyota that our investments are not welcomed and the contributions from each of our employees across America are not valued".