Trump to Reimpose Tariffs on Canadian Aluminum... Canada to "Respond with Immediate Retaliation"

[Image source=EPA Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] U.S. President Donald Trump has declared that he will reimpose a 10% tariff on Canadian aluminum products under the pretext of protecting domestic industries. The Canadian government immediately warned that it would respond with retaliatory tariffs.

According to the Wall Street Journal (WSJ) and others on the 6th (local time), President Trump said during a visit to Whirlpool's washing machine factory in Ohio, "I have signed a proclamation to protect American industry by reimposing tariffs on Canadian aluminum."

President Trump explained that as part of the United States-Mexico-Canada Agreement (USMCA), tariffs on Canada were removed, but there was a condition that increased exports to the U.S. would not take away aluminum-related jobs in the U.S. He claimed, "Canadian aluminum producers broke that promise," and argued that tariffs were necessary to protect American companies. Bloomberg News evaluated, "This move struck an important trade partner just weeks after the historic USMCA took effect."

In March 2018, President Trump announced and signed an executive order to impose tariffs of 25% on imported steel and 10% on aluminum under Section 232 of the Trade Expansion Act, citing "national security threats." Subsequently, a 10% aluminum tariff was imposed on Canada, Mexico, and others. However, some countries such as South Korea, Argentina, and Brazil were selectively exempted from tariffs or allowed quotas depending on the state of the U.S. industry.

Although President Trump said it was to protect domestic companies, WSJ reported that U.S. companies are actually opposing the reimposition of tariffs. Imposing tariffs on Canada would increase costs for U.S. manufacturers and could lead to retaliatory measures against U.S. exports, which could harm companies. Myron Brilliant, Vice President of the U.S. Chamber of Commerce, said, "We will ask the Trump administration to reconsider this move."

In fact, Canada stated that it would respond with retaliation if tariffs were reimposed. Canadian Deputy Prime Minister Chrystia Freeland issued a statement on the day, saying she intends to "quickly impose retaliatory tariffs dollar-for-dollar" in response to the U.S. measures. She emphasized, "Canadian aluminum does not weaken U.S. national security," and "Canadian aluminum strengthens U.S. national security, which has been achieved through decades of extensive cooperation between the two countries."