Washington/Montreal, 7 August 2020 (dpa/MIA) – Ottawa will impose “dollar-for-dollar” tariffs on US goods in retaliation for President Donald Trump’s decision to slap a 10-per-cent tariff on aluminium imports from Canada, Deputy Prime Minister Chrystia Freeland said Thursday.
Trump had previously imposed increased tariffs on Canadian steel and aluminium in 2018 but then removed them last year.
In a speech in Ohio at a factory, where he announced the plan on Thursday, Trump accused Canada of “taking advantage” of the US.
A statement from the US Trade Representative Office said Canadian imports have “surged above historical levels,” in justifying the measure, which has been on the cards since last June.
The move comes just five weeks after a new North American free trade deal, known as USMCA, went into effect between Canada, Mexico and the US. Trump had pushed hard for the agreement, which replaced NAFTA from 1994.
Freeland called the Trump administration’s decision to reimpose tariffs on Canadian aluminium imports on national security grounds “unwarranted and unacceptable.”
Freeland argued that Canadian aluminium has for decades contributed to strengthening US national security.
“In the time of a global pandemic and an economic crisis, the 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,” she said in a statement.
The president is facing re-election in November and is trailing in key polls, including in industrial swing states.
During his Ohio address, Trump pledged that if re-elected he would use tariffs to bring jobs back to the US, accusing foreign trading partners of drawing factories away from the country.
The Trump administration’s reimposition of tariffs on Canadian aluminium came in response to calls by the American Primary Aluminum Association (APAA), which represents two of the last three remaining primary producers in the United States.
The APAA has argued that a “surge” of Canadian aluminium exports to the US is threatening the viability of the domestic primary aluminium industry.
However, the US Aluminum Association, which represents more than 120 companies across the entire industry, disagrees with that position.
Aluminum Association president and CEO Tom Dobbins said data released Wednesday by the US Census Bureau showed that overall imports of primary aluminium from Canada into the United States declined by about 2.6 per cent from May to June.
Primary aluminium import volumes from Canada for the first six months of 2020 were nearly 5 per cent lower than in the same period in 2017, he added.
“With US aluminum demand down almost 25 per cent so far in 2020 – the first decline in nearly a decade – the industry can simply not afford more shocks to the market,” Dobbins said.
Trump’s move also drew criticism from the conservative US think tank Competitive Enterprise Institute, which called the move “misguided.”
Ryan Young, senior fellow at the institute, said it is time for Congress to reclaim the tariff-making authority it has delegated to the president.
“He is clearly incapable of using them responsibly — even during the COVID-19 pandemic,” Young said in a statement.
“Rather than raising taxes and tensions at the worst possible time, the administration should lower trade barriers and continue to pursue regulatory relief.”