Canada announced a C $ 3.6 billion ($ 2.7 billion, £ 2.1 billion) tariff on U.S. aluminum products a day after U.S. President Donald Trump imposed a tariff 10% on certain Canadian aluminum products.
Canada and the United States reached an agreement last year to lift tariffs on steel and aluminum imports that had been imposed for “national security” reasons.
Mr. Trump reintroduced them Thursday to protect US industry.
Canada’s retaliatory Friday tariffs go into effect on September 16.
The countermeasure was announced after Deputy Prime Minister Chrystia Freeland previously pledged a “dollar for dollar” fight.
“At a time when we are fighting a global pandemic … a trade dispute is the last thing anyone needs – it will only hurt economic recovery on both sides of the border,” she said in a statement. press conference.
Ms. Freeland called the US tariffs “ridiculous” and denied that Canadian aluminum poses a threat to US national security.
“Any American who buys a can of beer or soda or a car or a bicycle will suffer. In fact, the washing machines Trump stood in front of yesterday will get more expensive, ”she said.
The tariffs would come into effect after a period of consultation with Canadian businesses affected by the US tax.
Speaking in Ohio on Thursday, Trump said U.S. tariffs on Canada were needed to defend the domestic aluminum industry as producers in the north had broken their pledge to stop flood the American market with a cheaper product.
This step was “absolutely necessary to defend our aluminum industry,” he said.
As part of a 2019 agreement lifting the measures, the United States and Canada said they would monitor imports and, if one country is determined to buy too much, one of the other countries could request consultation and possibly re-impose tariffs.
A 10% tariff on imports of “unalloyed crude aluminum from Canada” was imposed Thursday.
What is the United States saying?
In a statement on Mr. Trump’s presidential proclamation, the Office of the United States Trade Representative said that “imports from Canada of the product which accounts for the largest share of Canadian aluminum exports to the states United have exceeded historical levels ”.
- What did Donald Trump actually achieve on trade?
- What Trump wants from global trade
The push has only intensified in recent months, despite a drop in US demand, the statement said.
Canada was exempted from tariffs in 2019 “on the basis of an agreement that imports of steel and aluminum products from Canada would remain at historic levels.”
What is the reaction?
The US Chamber of Commerce warns that a decision to lower tariffs could increase costs for US manufacturers.
Myron Brilliant, head of the industrial group’s international affairs, told Reuters the move was “a step in the wrong direction” and the measures are being opposed by US aluminum makers.
At the end of June, a group of 15 aluminum executives sent a letter to US Trade Representative Robert Lighthizer calling for the maintenance of tariff exemptions for aluminum in North America.
They said they had government data ruling out a “surge”, and argued that current import levels are largely in line with historical trends.
Prime Minister Justin Trudeau recently said he believed a new levy would have “no justification.”
The Canadian Chamber of Commerce has stated that “tariffs were the wrong instrument when they were first imposed in 2018, and they remain the wrong instrument now.”
The National Council of Foreign Trade, a US-based pro-trade group, has called the imposition of the new measures “misguided action”, warning that it could undermine the new free trade agreement between the United States. , Canada and Mexico, which entered into force in July.
But Michael Bless, managing director of Century Aluminum, said the move “helps ensure continued domestic production of this vital, strategic material and level the playing field for thousands of American aluminum workers,” said Reuters.