OTTAWA -- Canada is planning to retaliate with countermeasures after U.S. President Donald Trump announced his plans to impose a 10-per-cent tariff on Canadian aluminum imports, despite condemnation from aluminum organizations on both sides of the border.
âIn response to the American tariffs, Canada intends to swiftly impose dollar-for-dollar countermeasures,â said Deputy Prime Minister Chrystia Freeland in a statement late Thursday, promising more information about the retaliatory measures âshortly.â
The federal government was informed by the U.S. administration that the new tariff was coming, and will apply to unprocessed Canadian aluminum, as of Aug. 16.
Freeland called Trumpâs move
In announcing the new trade action at an event in Ohio, Trump said that: âCanada was taking advantage of us, as usual.â
Trump claimed on Thursday that the American aluminum business has been âdecimatedâ by Canada, calling it âvery unfairâ and accusing Canadian producers of flooding the U.S. with exports.
He also said that the new tariffs are âabsolutely necessary,â and pledged he will âalways put American workers first,â and use all tools at his disposalâincluding tariffsâto do that.
The United States had been considering whether to slap tariffs on aluminum imports coming from Canada, under Section 232 of the U.S. Trade Expansion Act, unless Canada agreed to restrict its export volumes through quotas.
vowed to stand up for Canadian workers, echoing Freelandâs commitment to retaliate.
Responding to the initial threat, Trudeau said that the U.S. âneeds Canadian aluminum,â as it does not produce enough to fill its domestic manufacturing needs.
"If they put tariffs on Canadian aluminum, theyâre simply increasing the costs of inputs, necessary inputs, to their manufacturing base which will hurt the American economy. Again, we see that our economies are so interlinked that punitive actions by the United States administration end up hurting Americans the same way they end up hurting Canadians," Trudeau said back in June.
INDUSTRY GROUPS ON BOTH SIDES AGAINST
Aluminum association groups on both sides of the Canada-U.S. border are speaking out about Trumpâs move, and are in agreement that itâs the wrong approach.
Aluminum Association of Canada President & CEO Jean Simard told ŰÎŰ´ŤĂ˝ that Canadian producers are not dumping aluminumâthe term for when selling under domestic priceârather that Canada is selling at the current international price.
âThereâs no dumping. Itâs a misuse of a word that is very well documented in international trade law. This is not dumping. This is quite an assumption by the president,â Simard said.
In a statement, President and CEO of the Aluminum Association Tom Dobbins said his organizationâ which represents aluminum production and jobs in the United Statesâis âincredibly disappointed,â and said Trumpâs move while trying to help will only add volatility to the industry as a whole.
âThe administration failed to listen to the vast majority of domestic aluminum companies and users by 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 U.S.-Mexico-Canada Agreement (USMCA) a reality, this ill-advised action on a key trading partner undermines the dealâs benefits at a time when U.S. businesses and consumers can least afford it,â said Dobbins.
He added that the reports of a surge of imports from Canada are âgrossly exaggerated,â citing that showed that overall primary aluminum imports from the U.S. to Canada declined about 2.6 percent from May to June and are below 2017 levels.
âThe few companies that stand to benefit from reinstated 232 tariffs on aluminum have cherry-picked government data and omitted important context to build their case, which unfortunately won the day,â he said.
TRUDEAU ACCUSED OF INACTION
Reacting to the late-in-the-day news, several Conservative MPs issued a joint statement saying Trudeau has âonce again let downâ thousands of Canadian aluminum workers.
âThe U.S. administration has been foreshadowing new tariffs on Canadian aluminum for weeks, so why didnât the Trudeau government take action to protect Canadian workers?â reads the joint statement.
âThe aluminum sector is vital to the Canadian economy. Itâs essential that this industry thrive, especially during COVID-19,â said the Conservative MPs.
In a statement, NDP MP and the partyâs international trade critic Daniel Blaikie said his thoughts were with the aluminum workers who will be hurt by Trumpâs âelectioneeringâ and the lack of Liberal action at home. He is calling for a federal plan to help protect Canadian aluminum jobs.
Freeland agreed in her statement, that âthe last thing Canadian and American workers need is new tariffs that will raise costs for manufacturers and consumers, impede the free flow of trade, and hurt provincial and state economies.â
NOT THE FIRST TIME
The Canadian Chamber of Commerce is also condemning the U.S. move., saying the tariffs will âonly exacerbate disruptions to North American supply chains.
In a statement the Chamberâs Senior Director of International Trade Mark Agnew said that Canadian aluminum exports pose âabsolutely no national security threatâ and the move is just as wrong as it was when it was tried by Trump in 2018.
Trump hit Canada with steel and aluminum tariffs 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 American steel, aluminum, as well as levelling a surtax on other goods.
A year later, Canada and the U.S. issued a joint statement announcing a decision to lift the tariffs, confirming that the two nations also agreed to terminate World Trade Organization litigation Canada launched after slamming the U.S. tariffs as "punitive" and "an affront" to Canada-U.S. relations.
The new NAFTA came into effect on July 1, meaning this latest American trade action comes just over a month into the new deal.
The new rules of origin for automobiles within the new NAFTA state that 70 per cent of the steel and aluminum purchased by North American automakers has to be produced in North America.
CALLS TO RETALIATE
The largest private sector union has called on Trudeau to âstand firmâ against the prospect of the re-imposition of tariffs and has suggested that Canada should retaliate.
Unifor National President Jerry Dias has previously called the prospective tariffs âtotally unwarranted.â
Speaking to the prospect of the tariffs, Unifor National President Jerry Dias has called the prospective tariffs âtotally unwarranted.â
Dias has said that the arguments that American steel producers are making to the Trump administration about the need for intervention â including that a surge in Canadian aluminum imports is causing aluminum prices to collapse â are âpreposterous and utterly divorced from reality,â because globally, due to COVID-19, demand for metal has gone down and thatâs led to the declining prices.
The Conservatives have also called for immediate retaliation to âsend a clear message to the U.S. that we will not restrict our exports,â and industry representatives are calling on Freeland to begin consulting the business community on what the governmentâs retaliatory response will be.