Trump reimposes US tariffs on raw Canadian aluminium

Canada promises to retaliate just weeks after regional free trade deal came into effect.

Aluminum angles sit stacked at a fabricator''s facility [Bloomberg]
Canada has a natural advantage in primary aluminium production because of its ample supply of hydroelectric power [File: Shannon VanRaes/Bloomberg]

United States President Donald Trump moved to reimpose 10 percent tariffs on some Canadian aluminium products to protect US industry from a “surge” in imports, angering Ottawa and some US business groups.

Canada pledged retaliation as tensions between the close allies rose just weeks after a new continental trade deal between the US, Mexico and Canada came into effect.

During a speech at a Whirlpool Corp washing machine factory in Ohio to tout his “America First” trade agenda, Trump said he signed a proclamation reimposing the “Section 232” national security tariffs. The step was “absolutely necessary to defend our aluminium industry”, he said.

Ohio is a critical swing state that Trump won in 2016. Polling shows a tight race with Democrat Joe Biden in the state ahead of this year’s November 3 presidential election.

Trump trails the former vice president in national polls and is competing with him for blue-collar, working-class voters. The tariff announcement could be aimed at showing those voters he intends to fight for their jobs and upend trade policy further if he remains in office.

But some prominent business groups criticised the move as counterproductive and unhelpful to US interests.

The US Trade Representative’s office said the 10 percent tariffs apply to raw, unalloyed aluminium produced at smelters. The tariffs do not apply to downstream aluminium products.

“Several months ago, my administration agreed to lift those tariffs in return for a promise from the Canadian government that its aluminium industry would not flood our country with exports and kill all our aluminium jobs, which is exactly what they’ve done,” Trump said. “Canadian aluminium producers have broken their commitment.”

Canada has a natural advantage in primary aluminium production because of its ample supply of hydroelectric power.

Canadian Deputy Prime Minister Chrystia Freeland said the tariffs would hurt workers and regional economies already hit by the coronavirus pandemic and pledged Ottawa would retaliate as it had done in 2018, when Trump first imposed punitive measures on Canadian steel and aluminium.

“In response to the American tariffs, Canada intends to swiftly impose dollar-for-dollar countermeasures,” Freeland said in a statement.

Freeland – in overall charge of relations with the United States – will formally respond to the tariffs at 11am (15:00 GMT) on Friday, her office said in a statement.

In 2018, Canada slapped tariffs on 16.6 billion Canadian dollars ($12.4bn) worth of US goods ranging from bourbon to ketchup. Trump lifted the sanctions in 2019.

‘Depression time’

Trump peppered his remarks with criticism of Biden and predicted “depression time” if the Democrat won –  plus higher taxes and more regulations.

“To be a strong nation, America must be a manufacturing nation and not be led by a bunch of fools. That means protecting our national industrial base,” Trump said.

Trump has sparred with close US allies over trade throughout his presidency.

The US Chamber of Commerce called the move “a step in the wrong direction” that would raise costs on companies and consumers.

The Aluminum Association, which says it represents companies that produce 70 percent of the aluminium and aluminium products shipped in North America, said the move undermined the new US-Mexico-Canada trade agreement at a time when year-to-date domestic demand was already down nearly 25 percent.

Michael Bless, chief executive of Century Aluminum, which is one of the few remaining US primary aluminium smelting companies and which lobbied for the tariffs, said the move “helps to secure continued domestic production of this vital strategic material”.

Source: Reuters