Donald Trump reimposes 10% tariffs on Canada’s raw aluminium, reacts many US business groups

On Thursday, August 6, the US President Donald Trump declared to reimpose 10 per cent tariffs on non-alloyed unwrought aluminium imported from Canada, as a measure to protect the US aluminium industry.

Speaking in Ohio, Trump said these tariffs were necessary to defend the US aluminium industry as the imports from Canada surged above historical levels in recent months, despite a drop in US demand.

The office of the United States Trade Representative pointed out that in May 2019, Canada was exempted from tariffs "on the basis of an agreement that imports of steel and aluminium products from Canada would remain at historical levels."

In 2018, the US had imposed an additional 25 per cent tariffs on steel and 10 per cent on aluminium from Canada and other countries, which fuelled a significant escalation of trade tensions with some of Washington’s closest allies and prompted retaliatory Canadian duties on C$16.6bn worth of US goods. In response to it, the tariffs on Canada were removed last year after negotiations in the USMCA trade deal. But under the deal, the US still had the right to reinstate tariffs, if necessary.

However, the recent tariff move by the US brought out many disagreements from some of the most prominent business groups in the United States, calling the move counterproductive and unhelpful to US interests.

The US Chamber of Commerce claimed the move “a step in the wrong direction” that would raise costs on companies and consumers.

The Aluminum Association, a representative body of the companies that produce 70 percent of the aluminium and aluminium products shipped in North America, said the move undermined the new US-Mexico-Canada trade agreement at a time when year-to-date domestic demand was already down nearly 25 percent.

On the other hand, many US aluminium companies applauded the move and praised the President’s actions. Such as Century Aluminium Company, which said, "President Trump’s action demonstrates this administration’s continued dedication to restoring the U.S. aluminum industry and American jobs. As policymakers focus on shoring up our manufacturing base and enhancing supply chain resiliency, the President’s leadership helps to secure continued domestic production of this vital strategic material and level the playing field for thousands of American aluminum workers.”