Canada has announced that it will reimburse dollar for dollar – to the tune of C $ 3.6 billion – after the US announced a 10% tariff on Canadian aluminum.
Donald Trump announced the new aluminum tariffs on Thursday at a campaign stop at a Whirlpool facility in Ohio, accusing Canada of profiting from its trade relationship with the US.
“The aluminum company was decimated by Canada, very unfair to our jobs and our large aluminum workers,” he said.
At a news conference on Friday, Canada’s Deputy Prime Minister Chrystia Freeland called the move “unfair and unacceptable” and said Canada would not escalate a trade war – but that it would not return.
Freeland described the tariff – which would apply to unalloyed, unprocessed aluminum – as an act of self-sabotage on the part of the US, as it would increase the production costs and selling prices of consumer goods, including beer cans, appliances and cars.
“These tariffs will hurt American consumers and they will hurt American workers,” the deputy prime minister said. “Every American who buys a can of beer, a soda, a car or a bicycle will suffer.”
She also dismissed Americans’ use of a national security clause in the country’s expansion law to trigger the tariff.
“Canadian aluminum is in no way a threat to American national security.” she said, adding that major U.S. industries, including defense, rely on Canadian aluminum. She also said it makes the North American aluminum sector globally competitive.
Thursday’s rates marked the second time the Trump administration has targeted Canadian metal. In June 2018, the US imposed a 10% rate on aluminum, along with a 25% rate on Canadian steel, also indicating national security concerns.
At the time, Canada was repaying C $ 16 billion in tariffs on U.S. products, focusing on items produced in major Republican-held constituencies, including ketchup, bourbon and lawn mowers.
The US finally backed away from the tariff in May 2019. The standoff on aluminum and steel was one of the last barriers that stood in the way of the two countries that signed the new Nafta agreement, USMCA .
This time, Freeland said Canada would spend 30 days consulting with Canadian consumers and businesses on what U.S.-made products should be at rates. On the list of potential targets are golf clubs, bicycles, exercise equipment and washing machines – such as those produced by Whirlpool.
Rumors about the rate started swirling earlier this summer. In June, the Canadian president of the Workers’ Union, Jerry Dias, told CBC: “The long-term negative consequences for Canada would be enormous. But it would be the same for the United States. All it does is grab the American consumer. ”
Freeland said the government hopes the US will cancel the aluminum tariff before it takes effect from August 16.
“Social understanding will prevail,” she said. “I just hope that happens sooner rather than later.”
