U.S. presents plan to drop duties on aluminum imports after Canada threatens retaliation


The U.S. Trade Representative’s office said today it’s poised to drop tariffs on Canadian aluminum imports — just hours before Canada was set to unveil counter-measures in retaliation.

A statement from the USTR said that after consultations with the Canadian government, the U.S. has determined that trade is expected to “normalize” in the last four months of the year, declining after “surges” experienced earlier in the year.

“Accordingly, the United States will modify the terms of the 10 per cent tariff imposed in August on imports of Canadian non-alloyed unwrought aluminum,” the statement reads.

The USTR’s statement lays out shipment volumes for each of those four months, which will be monitored to ensure they aren’t exceeded. If they do, the U.S. expects that imports would decline by a corresponding amount the following month.

The tariffs could be re-imposed if shipment volumes exceed 105 per cent of the stated volumes, it said.

“The United States will consult with the Canadian government 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,” the statement reads.

The statement comes after a period of intense trade brinkmanship between the two trading partners. Earlier today, Prime Minister Justin Trudeau said Canada would unveil retaliatory measures to counter “unjust” American aluminum tariffs this afternoon.

In a statement before the second day of a cabinet retreat in Ottawa, Trudeau said the government would act to protect Canada’s aluminum industry.

“I want to highlight that we will be taking action to counter the unjust tariffs put on Canadian aluminum by the United States,” he said. 

“As I’ve said many times, we will always be there to defend Canadian workers. We will defend our aluminum sector.”

Deputy Prime Minister and Finance Minister Chrystia Freeland and Small Business, Export Promotion and International Trade Minister Mary Ng were set to release details of the plan at 3 p.m. ET during a news conference in Ottawa. 

The government had said during the summer that unless the U.S. dropped its latest round of aluminum tariffs, Canada would impose $3.6 billion in counter-measures.

Canada was responding to a 10 per cent tariff announced by President Donald Trump in August, a move that hit more than half of Canada’s aluminum exports to the U.S.

NDP Leader Jagmeet Singh said the tariffs and counter-tariffs will hurt workers on both sides of the border because the aluminum sector is so interconnected. He said the government should have done more to convince the Americans not to impose the duties in the first place.

“I think we knew that the president of the United States has done something like this in the past. We should have put in place steps ahead of time and been proactive to prevent this from happening,” he said.

“Now that we’re in it, the retaliatory measures are something I support, but I want to make sure that the money that’s gained in the retaliatory measures actually goes towards supporting the industry, supporting workers specifically.”

U. S. Chamber of Commerce executive vice-president Myron Brilliant issued a statement welcoming the news that the U.S. will drop what the organization called “damaging” tariffs.

“What American manufacturers need now is certainty that these tariffs won’t make another reappearance. Setting aside these threats once and for all will allow American job creators to focus on economic recovery,” the statement reads.

‘Dollar-for-dollar’ countermeasures

Trump announced that he would impose the tariffs during a campaign speech at a Whirlpool factory in Ohio, citing national security concerns.

At the time, Freeland responded quickly by stating that Canada “intends to swiftly impose dollar-for-dollar countermeasures” in response.

“Canadian aluminum does not undermine U.S. national security. Canadian aluminum strengthens U.S. national security, and has done so for decades through unparalleled co-operation between our two countries,” she said in August.

Ontario Premier Doug Ford also publicly lashed out at Trump’s “unacceptable” decision, saying it could compromise the historically strong trade relationship between the two countries.

He urged Ontario residents to “hit ’em where it hurts,” noting that the province’s consumer base is an economic powerhouse.

Source link