Canadians, Domestic Industries Dismayed By Return of Section 232 Tariffs on Canadian Aluminum
As Canadians consider which of 68 aluminum-containing products to put on a tariff retaliation list, U.S. industrial producers and buyers of aluminum reacted with dismay to the news that a large segment of Canadian aluminum imports will face a 10% tariff starting Aug. 16.
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“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,” The Aluminum Association said. “The few companies that stand to benefit from reinstated 232 tariffs on aluminum have cherry-picked government data and omitted important context to build their case, which unfortunately won the day.”
President Donald Trump made the announcement about the return of Section 232 tariffs on some Canadian aluminum on Aug. 6, at a Whirlpool washing machine plant. Washing machines, refrigerators, bicycles, office furniture and other value-added products are on the Canadian list of targets, not just aluminum bars, wire, foil and scrap.
The trade group that represents Detroit's Big Three automakers said that the tax will hurt “the hundreds of thousands of workers we employ at a time when the industry can least afford it.” American Automotive Policy Council CEO Matt Blunt said the U.S. trade representative should give the USMCA requirements to purchase North American steel and aluminum time to work, “rather than reimposing tariffs on key trading partners.”
The Section 232 tariffs on Canadian steel and aluminum were imposed in June 2018 and lifted in May 2019. Those covered about $12.8 billion worth of Canadian exports, and Canada's retaliation was the same size. This action is smaller, about $2.7 billion, and the Canadian response will be “dollar for dollar,” Deputy Prime Minister Chrystia Freeland said.
Freeland, in a press conference Aug. 7, said she hopes the U.S. will change its mind before Aug. 16, adding, “I am confident ultimately common sense will prevail, I just hope that happens sooner rather than later.”
The head of the House Ways and Means Committee and the head of its Trade Subcommittee had said they oppose bringing back tariffs on Canadian aluminum, an action that had been rumored for more than a month (see 2006250048). But they did not put out statements after the action, nor did Senate Finance Committee Chairman Chuck Grassley. Grassley, an Iowa Republican, had pushed hard for the lifting of Section 232 tariffs on Canada and Mexico in 2018 and 2019, as their retaliation at that time hit pork, a major Iowa commodity.
Freeland said “U.S. national security remains the ostensible reason for these tariffs. A ludicrous notion.” U.S. manufacturers that make military goods import Canadian aluminum; Canada is considered part of the U.S. industrial base by the Pentagon. “Any American who buys an American can of beer or a soda, or a car or a bike will suffer,” Freeland said.