Canada has pledged to strike back “swiftly and strongly” against what Deputy Prime Minister Chrystia Freeland called the “unnecessary, unwarranted, and entirely unacceptable” aluminum tariffs recently announced by President Donald Trump.
During a speech at a Whirlpool manufacturing plant in Ohio last week, Trump accused Canada of breaking a promise not to flood the U.S. market with the Canadian metal.
“Canada was taking advantage of us, as usual,” Trump said.
“The aluminum business was being decimated by Canada, very unfair to our jobs and our great aluminum workers.”
Accordingly, the White House announced that it would reimpose a tariff of 10% on certain types of aluminum (I.e., non-alloyed unwrought aluminum provided for in subheading 7601.10) produced in Canada.
Claiming that raw aluminum imports crossing the border “have increased substantially to a level above historical volumes of trade over a prolonged period” and thereby “threatens to harm domestic aluminum production and capacity utilization,” the Office of the U.S. Trade Representative has once again invoked provisions of Section 232 of the Trade Expansion Act of 1962) to justify the tariffs as being a potential threat to U.S. national security.
In 2018, the administration had likewise placed punitive tariffs on Canadian aluminum and steel under the same Cold War-era law before finally agreeing to lift them as a condition of finalizing the new trade pact that replaced NAFTA.
Following the latest U.S. move, Canadian business leaders demanded that Ottawa retaliate forcefully. “Canada has to be as aggressive as needed to get the Trump administration’s attention. We have to play this game,” said Dennis Darby, head of the Canadian Manufacturers and Exporters, a lobbying group.
Ontario Premier Doug Ford said the Trudeau government should slap tariffs on every available item possible, and that citizens should skip over American products and to opt to buy Canadian-made goods. “We will come back swinging like the U.S. has never seen before,” Mr. Ford said.
Freeland, however, said Canada would seek to avoid escalating the dispute, saying the retaliation would be reciprocal and limited in scope. To that end, the government on Friday unveiled a list of U.S.-made items it could possibly target that together have a combined value of $3.6 billion (US $2.71 billion), or the equivalent of what Canadian aluminum faces from the U.S. tariff.
Products targeted contain aluminum and include items such as bars of the metal and consumer goods like washers, refrigerators and golf clubs. The goods targeted are meant to minimize damage to the Canadian economy, “and to have the strongest possible impact in the U.S.,” Freeland said. “We hope when Americans look at this list, they will understand why this dispute is a bad idea.”
As is the practice with such retaliatory actions, a disproportionate number of the more than five dozen items on Canada's potential hit-list are from key U.S. election battleground states including goods such as paint dyes and aluminum waste (Michigan); refrigerators and bicycles (Wisconsin); and aluminum powders and bars (Pennsylvania).
The Government of Canada is accepting comments on its proposed retaliatory measures. Written comments should be provided no later than September 6, 2020.
Submissions should include, at a minimum, the following information:
- Canadian company/industry association name and contact person.
- Relevant eight-digit tariff item(s) and description of the goods of particular interest.
- Reasons for the expressed support for, or concern with, the proposed countermeasures, including detailed information substantiating any expected beneficial or adverse impact.
Commenters should identify whether any information provided in the submissions is commercially sensitive.
All comments and general inquiries should be sent to firstname.lastname@example.org. Note that only submissions by email will be accepted. Please include the term “Aluminum countermeasures” in the subject line of your submission.
The U.S. trade action applies to goods imported on or after August 16, 2020.
Correction: It had previously been indicated that Canada’s countermeasures would take effect at the same time as the re-imposition of duties by the U.S. In fact, according to the Department of Finance, the retaliatory measures are currently scheduled to be implemented on September 16, 2020, and will remain in place until the U.S. government eliminates its Section 232 tariffs against Canada.
Need More Information?
Additional background information concerning this ongoing dispute can be found in a previous post about this issue on our blog here.
Should you have any questions about this trade dispute and how your imports may be affected, don’t hesitate to contact one of our knowledgeable trade experts to work through the details.