The federal government has been informed by the US administration that the new tariff is coming and that it will apply to unprocessed Canadian aluminum as of August 16.
Trump said Thursday that the US aluminum sector had been “decimated” by Canada, calling it “very unfair” and accusing Canadian producers of flooding the United States with exports.
He also said the new tariffs are “absolutely necessary,” and pledged that he will “always put American workers first” and use all the tools at his disposal – including tariffs – to do so.
The United States had considered reducing tariffs on aluminum imports from Canada, under Section 232 of the United States Trade Expansion Act, unless Canada agreed to restrict its export volumes through quotas.
Responding to the initial threat, Prime Minister Justin Trudeau said the United States “needs Canadian aluminum” because it is not producing enough to meet its domestic manufacturing needs.
“If they impose tariffs on Canadian aluminum, they are simply increasing the costs of the inputs, the necessary inputs, at their manufacturing base, which will hurt the American economy. Again we see that our economies are so tied that punitive measures by the United States administration ends up hurting Americans the same way it ends up hurting Canadians, ”Trudeau said in June.
Trudeau has yet to comment on the reopening of this trade divide between Canada and the United StatesINDUSTRIAL GROUPS ON BOTH SIDES AGAINST
Aluminum association groups on both sides of the Canada-U.S. Border denounce Trump’s decision and agree it is the wrong approach.
Aluminum Association of Canada president and CEO Jean Simard told CTV News Canadian producers do not dump aluminum – the term used to sell at a domestic price – rather that Canada sells at the current international price.
“There is no dumping. It is a misuse of a word that is very well documented in international trade law. It is not dumping. This is entirely an assumption by the president, ”said Simard.
In a statement, the President and CEO of the Aluminum Association, Tom Dobbins, said his organization – which represents aluminum production and jobs in the United States – is “incredibly disappointed,” and said that Trump’s decision while trying to help will only add volatility to the industry as a whole.
“The administration failed to listen to the vast majority of national aluminum companies and users in reinstating Section 232 tariffs on Canadian aluminum. After years of complex negotiations and hard work by government, industry and other leaders across North America to make the United States-Mexico-Canada Agreement (USMCA) a reality, this action misguided action on a key trading partner undermines the benefits of the deal at once. when US businesses and consumers can least afford it, ”Dobbins said.
He added that reports of a surge in imports from Canada are “grossly exaggerated,” citing data released Wednesday by the US Census Bureau which showed that total imports of primary aluminum from the United States to Canada declined about 2.6% from May to June and are below 2017 levels.
“The few companies that could benefit from the 232 restored aluminum tariffs have handpicked government data and have omitted an important context to build their case, which unfortunately won the day,” he said.
TRUDEAU ACCUSED OF INACTION
Reacting to the late-day news, several Conservative MPs released a joint statement saying Trudeau had “once again let down” thousands of Canadian aluminum workers.
“The US administration announced new tariffs on Canadian aluminum weeks ago, so why hasn’t the Trudeau government taken action to protect Canadian workers? read the joint statement.
“The aluminum sector is vital to the Canadian economy. It is essential that this industry thrives, especially during COVID-19, ”Conservative MPs said.
In a statement, NDP MP and party international trade critic Daniel Blaikie said his thoughts were with the aluminum workers who will be hurt by Trump’s “election” and lack of of liberal action at home. He calls for a federal plan to help protect Canadian aluminum jobs.
NOT THE FIRST TIME
The Canadian Chamber of Commerce condemns the US move, saying tariffs “will only exacerbate disruption to North American supply chains.”
In a statement, the chamber’s senior director of international trade, Mark Agnew, said Canadian aluminum exports posed “absolutely no threat to national security” and that the move was just as bad as it was. was when she was tempted by Trump in 2018.
Trump hit Canada with tariffs on steel and aluminum in May 2018, during negotiations for the new NAFTA deal. The tariffs remained in place for a year, during which time Canada reciprocated with dollar-for-dollar countermeasures on US steel and aluminum, as well as leveling a surtax on other products. .
A year later, Canada and the United States issued a joint statement announcing the decision to lift tariffs, confirming that the two countries also agreed to end the World Trade Organization dispute that Canada had initiated. after calling the US tariffs “punitive” and “an affront” to Canada-US relations.
The new NAFTA went into effect on July 1, which means this latest US trade move comes just over a month after the new deal began.
WILL CANADA WITHDRAW?
The largest private sector union called on Trudeau to “stand firm” against the prospect of tariff reimposition and suggested Canada should fight back.
Unifor National President Jerry Dias previously called the potential tariffs “totally unjustified.”
Speaking from the tariff perspective, Unifor National President Jerry Dias called the potential tariffs “totally unjustified.”
Dias said that the arguments that U.S. steel producers are making to the Trump administration about the need for intervention – including that a surge in Canadian aluminum imports causes aluminum prices to collapse – are “absurd and totally out of touch” because on a global scale, due to COVID-19, demand for the metal has declined, resulting in lower prices.
The Conservatives are now calling for immediate retaliation to “send a clear message to the United States that we will not restrict our exports.”
Industry representatives are calling on Deputy Premier Chrystia Freeland to begin consulting with the business community on what the government’s retaliatory response will be.