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U.S. Abandons Aluminum Tariffs, Canada Drops Plans to Retaliate

Posted September 15, 2020


Today was to have been the date on which the Canadian government unveiled $3.6 billion in dollar-for-dollar retaliatory duties to counter the “unjust” re-imposition in August of Section 232 “national security” tariffs on Canadian exports of unwrought aluminum products.
Canada-US Flags on Cracked Wall w/ Raw Aluminum Bars
That is, until the Trump administration backed down, with U.S. Trade Representative Robert Lighthizer announcing this morning that the contentious 10% levy on Canadian aluminum products would be repealed, retroactive to September 1.

According to Lighthizer, following consultations with the Canadian government, his office has determined that trade in aluminum is expected to “normalize” in the last four months of the year, declining after “surges” experienced earlier in the year.

U.S. Conditions


Shipment volumes for each of the four months remaining in 2020 have been established by the USTR (83,000 tons in September/November and 70,000 tons in October/December) who will monitor them to ensure they are not exceeded. In such cases, the USTR states it “expects that shipments in the next month will decline by a corresponding amount.”

Additionally, the USTR warns that “if imports exceed 105% of the expected volume in any month the United States may re-impose the 10% tariff going forward.”

Lighthizer concluded his statement by saying that consultations with the Canadian government will be held at the end of the year “to review the state of the aluminum trade in light of trade patterns during the four-month period and expected market conditions in 2021.” 

Canadian Reaction


While obviously welcoming the Trump administration’s decision, Deputy Prime Minister Chrystia Freeland was quick to point out that Canada that had not agreed to quotas imposed by the White House, saying this is not a negotiated deal between the two countries.

“What has happened today is that the United States has chosen to unilaterally lift its tariffs on Canadian aluminum exports to the United States… That’s the decision the U.S. has taken,” Freeland said, cautioning that if Section 232 tariffs are re-imposed, Canada intends to fight back with “a reciprocal dollar-for-dollar retaliation.”

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