The Trudeau government will respond to U.S. President Donald Trump’s move to again slap tariffs on Canadian aluminum by levelling $3.6 billion in retaliatory tariffs on imports of the metal from south of the border, Deputy Prime Minister Chrystia Freeland said on August 7. Freeland said during a press conference that the federal government will hold consultations with consumers and businesses for 30 days on a broad list of products from the United States containing aluminum, after which Canada will impose tariffs on certain items from that list. “The final tariffs that we impose will be … perfectly reciprocal, dollar-for-dollar, and the total amount will be $3.6 billion,” Freeland told reporters.

Ottawa’s decision follows the Trump administration’s announcement on August 6 that the U.S., due to supposed national-security concerns, would reimpose a 10% tariff on certain Canadian aluminum imports starting Aug. 16. Trump imposed a similar-sized import tax on Canadian aluminum back in 2018, which was coupled with a 25% tariff on Canadian steel. This prompted the Canadian government to bring in retaliatory tariffs on up to $16.6 billion in U.S. imports. Ottawa and the White House ultimately agreed to remove the added taxes in 2019, defusing the trade fight.

However, during a speech at a Whirlpool Corp. factory in Ohio on August 6, Trump claimed Canada had since flooded the U.S. with aluminum, decimating his country’s industry. The Canadian government fired back that the country’s aluminum does not undermine U.S. national security and warned that it would respond in kind to the tariffs.

Ottawa has particularly taken issue with the fact that the tariffs are coming during an economic crisis caused by the coronavirus pandemic. The federal government has further claimed the move will hurt American consumers, with Freeland noting their “retaliation list” included washing machines, which Whirlpool makes. “We will not escalate and we will not back down,” the deputy prime minister said on August 7.

The main victims of the U.S. import tax will be consumers of goods ranging from cars to refrigerators to airplane parts, as well as the “mom-and-pop shops” south of the border that process Canadian aluminum into components and products, said Jean Simard, head of the Aluminium Association of Canada. According to the Aluminium Association of Canada, its industry supports more than 8,700 jobs and generates $8.3 billion in exports. 

The Aluminium Association of Canada said on August 6 it was “very disappointed” by the new tariffs coming on the heels of the new trade deal. Moreover, the group said exports of primary aluminum from Canada into the U.S. actually declined by around 2.6% from May to June. “This measure is likely to punish U.S. consumers more than any other group, and is bound to reward aluminum exporters in other countries like Russia and China, more than U.S. producers,” Bank of Montreal chief economist Douglas Porter wrote in a note published Friday.

Meanwhile, there is something of a lopsided split in the U.S. aluminum industry regarding the tariffs. The Trump administration had been nudged by the American Primary Aluminum Association — which represents just two companies, one of which is backed by Switzerland-headquartered Glencore Plc — to restore the tariffs on Canadian imports. 

Another group that represents dozens of companies, the Aluminum Association, has argued against the tariffs. Like its Canadian counterpart, the group has disputed that there has been a surge of Canadian aluminum into the U.S. “We’re incredibly disappointed that the administration failed to listen to the vast majority of domestic aluminum companies and users by reinstating Section 232 tariffs on Canadian aluminum,” Tom Dobbins, president and CEO of the Aluminum Association, said in a statement.

The Ontario government has also voiced displeasure with Trump’s announcement, saying the province exported around $2.4 billion of aluminum and aluminum products to the U.S. in 2019, while importing close to the same amount. “We will come back swinging like they’ve never seen before,” Ontario Premier Doug Ford declared during his own August 7 press conference.

Survey suggests majority of Americans, Canadians oppose Trump tariff on imported aluminum
In a web survey conducted by polling firm Leger and the Association for Canadian Studies, 58% of American respondents said they disagreed with the 10% import tax. 90% of Canadians who took part in the survey objected to the White House’s tariff. 

Please note: polls created from internet panels are not random samples, the survey cannot be assigned a margin of error.

Source: CBC
Source: Global News
Source: Toronto Star
Source:Financial Post
Source: Globe & Mail
Source: CBC