The Canadian federal government is celebrating the United States’ decision to withdraw the 10 percent aluminum tariff.
Canadian Deputy Prime Minister Chrystia Freeland said that the tariffs’ imposition was a mistake right from the start. The aluminum workers from both sides of the border were affected by the tariffs, and Freeland says the tariff lifting is excellent news to them. The Canadian government was prepared to announce retaliatory measures the same day the U.S. back down from the tariffs.
The decision to withdraw was announced by the U.S. Trade Representative Robert Lighthizer. Lightizer said the decision was arrived at after consultation with Canadian officials. He added that the expectations are that the trading of aluminum will balance in months. However, Lighthizer cautioned that the withdrawal of tariffs isn’t string attached. The U.S. may consider re-imposing the tariffs should the import surge exceeding the set cap between September and December.
In a statement, Lighthizer said that the U.S. would consult with the Canadian government at the end of the year. The four months will give them a time frame to get a new light of aluminum trade patterns. According to Freeland, the U.S.
imposition of the quotas is something the two countries haven’t negotiated. Freeland added that the tariffs were terrible for both sides. However, she cautioned that should the U.S. decide to hit again, they will be ready to reciprocate with tariffs.
The U.S. President Donald Trump placed the aluminum tariffs on 16 August 2019 under the U.S. Trade Expansion Act. Canadian Prime Minister also affirmed that his administration would take action to defend the aluminum sector. Together with Export Promotion and International Trade Minister Mary Ng, Freeland announced dropping their retaliatory action in a press conference. The two officials hinted that Canada was ready to hit back with a $3.6 billion should the U.S. bring in the tariffs again.
The U.S. product that was a potential target of Canadian tariffs includes aluminum products such as beverage cans, washing machines, bicycles, golf clubs, and refrigerators, which will likely hike the goods’ prices on both sides. While imposing the tariffs, Trump cited that Canadian were very unfair in the aluminum business. He also added that they were flooding the U.S. with exports. According to reports by the Canadian press, Maine, Vermont, and New Hampshire forced the White House to drop the tariffs.
The association of Aluminum in Canada and the U.S. also denied the notion that Canada was dumping aluminum. Canadian sell aluminum at the international price rather than the domestic price. Experts also claim the tariffs are bad today as they were when Trump introduced them in 2018. According to them, the decision to impose tariffs was implemented because Trump refused to listen to domestic aluminum companies. The 2018 tariffs remain for a year, Canada reciprocated with tariffs on American steel, aluminum, and a surtax on other products. In 2019, both countries announced a decision to remove the tariffs.