Canada vows to take countermeasures after US reimposes 10% aluminum tariff

Canada has vowed to take countermeasures after US President Donald Trump announced the decision to reimpose a 10-percent tariff on Canadian aluminum imports, citing national security concerns.

"In response to the American tariffs announced today, Canada will impose countermeasures that will include dollar-for-dollar retaliatory tariffs," Canadian Prime Minister Justin Trudeau said on Thursday evening. "We will always stand up for our aluminum workers. We did so in 2018 and we will stand up for them again now."

Trump said Thursday afternoon during a campaign speech at a factory in Ohio that the 10-percent tariff, which will affect non-alloyed unwrought aluminum articles, will take effect on August 16.

The US aluminum business has been "decimated" by Canada, Trump said, adding that the new tariff is absolutely necessary.

In response, Canadian Deputy Prime Minister Chrystia Freeland said in a statement that Canadian aluminum strengthens US national security and has done so for decades through unparalleled cooperation between the two countries, adding, "Canada intends to swiftly impose dollar-for-dollar countermeasures."

Canada is the largest source of US imports of non-alloyed unwrought aluminum, accounting for nearly two-thirds of total imports from all countries in 2019 and approximately 75 percent in the first five months of 2020.

In 2017, Canadian aluminum sales to the United States reportedly totaled US$8.4 billion, accounting for 80 percent of Canada's total exports of the metal.

In 2018, the Trump administration unilaterally imposed a 25-percent tariff on steel imports and a 10-percent tariff on aluminum imports globally, citing national security concerns. Canada retaliated with tariffs on a string of US products from bourbon to ketchup.

The two sides agreed to lift the tariffs last year, and that if there were a surge in any Canadian aluminum or steel product, the United States could re-impose tariffs on that specific product and Canada would not retaliate with tariffs on other goods.

Apart from two US companies — Century Aluminum Co. and Magnitude 7 Metals, which have reportedly lobbied Trump to reimpose tariffs — others in the US industry said there has been no surge and overall imports from Canada are comparable to their levels before the tariffs were introduced.

According to the Aluminum Association of Canada, Canadian aluminum exports fell 16 percent in June and 40 percent in July this year, as the system was starting to rebalance during the COVID-19 pandemic due to lower demand for higher-end products.

AAC President Jean Simard said the new US tariffs will destabilize Canada's industry and supply chains in an economy already struggling amid the COVID-19 pandemic.

"It's the wrong thing for the wrong reason at the wrong time for the wrong people," Simard said.