Friday, 07 August 2020 22:08

Despite New NAFTA, Trump Slaps Canada with 10% Aluminum Tariff

Written by Keith Laing, The Detroit News


Just one month after the replacement for the North American Free Trade Agreement took effect, the Trump administration is re-imposing a 10% tariff on aluminum imports from Canada.

In a proclamation signed Aug. 6, President Donald Trump said that he is setting aside a previous commitment to exclude Canada and Mexico from tariffs on foreign steel and aluminum he implemented in 2018 under a section of law that allows the president to unilaterally impose tariffs to protect the nation's security.


Trump said he is doing so because Canadian aluminum imports have "increased substantially in the 12 months following my decision to exclude, on a long-term basis, Canada from the tariff" imposed in 2018. 


"Imports of non-alloyed unwrought aluminum from Canada during June 2019 through May 2020 increased 87% compared to the prior 12-month period and exceeded the volume of any full calendar year in the previous decade," Trump said in the proclamation.


"Canada was taking advantage of us, as usual," Trump said during a speech in Ohio. "I signed it and imposed because the aluminum business was being decimated by Canada. Very unfair to our jobs and our great aluminum workers."  


The 10% tariff on foreign aluminum, along with a 25% tariff on imported steel, were imposed by Trump under a section of federal law---Section 232 of the Trade Expansion Act of 1962---that allowed him to place levies on foreign steel and aluminum under the guise of protecting the country from a national security threat. 


The U.S. Mexico Canada Agreement requires automakers to produce cars with 75% of parts originating from the U.S., Canada or Mexico---up from 62.5%---within five years to qualify for duty-free treatment. The U.S. was expected to include Canada and Mexico from steel and aluminum tariffs once the agreement was signed. 


Detroit automakers declined to comment, deferring to the lobbying groups in Washington who decried the move to re-impose tariffs on Canadian aluminum by Trump.  


“This move will place American Automakers at a competitive disadvantage with our global competitors, while hurting the hundreds of thousands of workers we employ at a time when the industry can least afford it," the American Automotive Policy Council, which lobbies for Ford Motor Co., General Motors Co. and Fiat Chrysler Automobiles NV, said in a statement. "Instead, we should let the USMCA’s groundbreaking steel and aluminum requirements achieve their intended effect, rather than reimposing tariffs on key trading partners.”

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