After brief trade truce, US slaps levy on Canadian aluminum
WASHINGTON (AP) — After more than two years of browbeating and trade sanctions on Canada and Mexico, President Donald Trump strong-armed the United States’ neighbors into agreeing to supplant a 25-year-old North American trade agreement with one of his own.
His pact, meant to update the old deal and encourage more manufacturing in the United States, was expected to restore clarity and predictability to the rules governing $1.4 trillion in annual in U.S. trade with Canada and Mexico.
The tranquility didn’t last long.
A little more than a month after Trump’s U.S.-Mexico-Canada Agreement took e ect July 1, the Trump administration is scheduled to re-impose a 10% import tax on Canadian aluminum Sunday, raising tensions between the two allies.
Trump accuses Canada of flooding the U.S. market with its raw, unprocessed aluminum. The Aluminum Association, which represents U.S. and foreign aluminum companies and opposes the tariffs, counters that a jump in Canadian raw aluminum shipments to the United States is within historical norms and reflects stepped-up production from a Canadian smelter that had been shut down by a labor dispute.
“Our hope is that the administration will reconsider this decision,’’ Kirsten Hillman, Canadian ambassador to the United States, said in an interview. The Canadians are poised to retaliate with tariffs on U.S. aluminum and other products.
Trump’s re-imposed tari s will raise costs for automakers and other U.S. manufacturers that use imported aluminum in their products. As a result, Hillman said, “it’s going to be more expensive to buy a car or a truck or to buy parts for your car.’’
In 2018, Trump imposed tariffs on aluminum imports — Canada’s included. He contended that imports threatened to put U.S. aluminum producers out of business, jeopardizing the U.S. military’s access to the metal in times of war. To justify the tariffs, Trump dusted off the little-used
Section 232 of the Trade Expansion Act of 1962, declaring the aluminum imports a national security threat.
Critics argued that the tari s did little to deal with the biggest problem confronting the aluminum industry: massive overproduction by China that flooded global markets and pushed down prices. China was largely unscathed by Trump’s tari s because its aluminum exports are already limited by earlier U.S. trade sanctions.