U.S. Removes Canada Aluminum Tariffs Amid Retaliation Threat

Andrew Cummings
September 15, 2020

The OUSTR said the decision comes "after consultations with the Canadian government determined that trade in non-alloyed, unwrought aluminum is likely to normalize in the last four months of 2020, with imports declining sharply from the surges experienced earlier in the year". The 10% tariffs went into effect on August 15.

The devil might be in the details here.

A Canadian government source said Canada has signed no deal with the US regarding aluminum trade and that the quotas the United States has published are entirely the making of the USA government.

Prime Minister Justin Trudeau on Tuesday morning said Ottawa would lay out its plans for retaliatory tariffs this afternoon, adding that they would counter Trump's "unjust" levies against Canadian manufacturers. "We're glad USTR agrees", she said, cautioning that should the USA decide to take up the tariff fight again, Canada will be ready to hit back with "a reciprocal dollar-for-dollar retaliation".

"This is the US deciding to drop the tariffs" before a scheduled 3 p.m. news conference by Deputy Prime Minister Chrystia Freeland which was set to unveil Canada's list of American products targeted for tariffs.

The retreat comes as Parliament is set to resume with a throne speech on September 23, which Trudeau has promised will outline "a detailed vision for the future and a plan to keep Canadians safe while we rebuild a stronger Canada that works for everyone". "And the way we can prevent that is by remaining vigilant", Trudeau said, reiterating the importance of wearing masks and practicing social distancing.

Within a week, the Trudeau government closed the Canada-U.S. border to non-essential traffic and restricted some global flights to four airports - too late to be effective and far less than other countries with much better records of containing COVID-19 had already implemented.

Among the list of potential US aluminum products Canada had its sights on are beverage cans, washing machines, refrigerators, bicycles and golf clubs, meaning prices on both sides of the border would likely increase for these products.

Mr. Trump imposed them under Section 232 of the Trade Expansion Act, which allows the President to use tariffs for "national security" purposes.

Trump hit Canada with steel and aluminum tariffs in May 2018, during negotiations for the new NAFTA deal. "We're glad the USA lifted tariffs - that's a victory for Canada and the U.S".

Ahead of the USA backing down, NDP Leader Jagmeet Singh said that the government should be taking a more proactive approach to avoid similar instances in the future.

He said the resumption of classes and the reopening of the Canadian economy, meaning more people are back to work, had led to an increase in case numbers.

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