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Canada retaliates on US aluminium tariffs

The government of Canada intends to impose punitive retaliation measures totalling up to C$3.6 billion (US$2.7 billion) on US-made aluminium products after US president Donald Trump last week reinstated a 10% tariff on Canadian aluminium products.
Canada retaliates on US aluminium tariffs Canada retaliates on US aluminium tariffs Canada retaliates on US aluminium tariffs Canada retaliates on US aluminium tariffs Canada retaliates on US aluminium tariffs

Canada has vowed to retaliate following US president Donald Trump's re-imposition of import tariffs on Canadian aluminium products

Deputy prime minister Chrystia Freeland said late last week Canada intended to "swiftly impose dollar-for-dollar countermeasures" following a 30-day public consultation period.

The list of targeted US products appear to target key voter swing states such as Michigan, where substantial aluminium manufacturing capacity is based.

In May last year, the US, Canada and Mexico signed a bilateral deal to lift all retaliatory, or so-called Section 232 tariffs. According to the agreement, if surges in imports of specific steel and aluminium products occur, the US may re-impose Section 232 tariffs on those products. Any retaliation by Canada and Mexico would then be limited to steel and aluminium products.

Freeland stressed Canadian aluminium did not undermine US national security.

"Canadian aluminium strengthens US national security and has done so for decades through unparalleled cooperation between our two countries.

"In the time of a global pandemic and an economic crisis, the last thing Canadian and American workers need is new tariffs that will raise costs for manufacturers and consumers, impede the free flow of trade, and hurt provincial and state economies," said Freeland.

"Further, with the new NAFTA having come into force on July 1, now is the time to advance North American economic competitiveness - not hinder it. Through robust, new rules of origin for automobiles, the new NAFTA ensures 70% of the aluminium purchased by North American automakers is produced in North America."

The British Columbia provincial government also weighed in on the matter Friday, with premier John Horgan saying the tariff action was disappointing. "Our aluminium exports do not harm the US market. In fact, US-imposed tariffs will hurt the American economy. We also note much of the US aluminium sector opposes any re-imposition of tariffs," he said.

Ontario premier Dough Ford said the tariffs undermined the benefits of the highly integrated US-Ontario trading relationship that were set to continue under the new Canada-United States-Mexico Agreement.

"We welcome the federal government's commitment to defend the interests of Ontario's aluminium sector and businesses in Canada and the US. We urge them to press the US administration for immediate and permanent removal of its tariffs on Canadian aluminium, and to ensure that no other trade impediments such as quotas are introduced," said Ford.

BC is home to Rio Tinto's BC Works smelter in Kitimat, which produces about 385,000 tonnes of metal per annum. Rio Tinto also owns the Saguenay-Lac-Saint-Jean aluminium production hub in Quebec, which is responsible for close to half of all its global aluminium production.

Canada and the US share a highly integrated aluminium market. Combined bilateral trade in primary and semi-finished aluminium products between 2017 and 2019 averaged C$11.1 billion annually.

Canada is the world's fourth largest aluminium producer, with 2.8Mt produced in 2019. Canadian aluminium has the lowest carbon footprint compared with other large producers.