Towards a new American tax on Canadian aluminum?

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By: Altin Lazaj

The United States would again consider re-establishing a 10% tariff on aluminum imports from Canada to protect its industry. According to the Bloomberg agency, which is the source of this information, the Trump administration could make the announcement as of this Friday.

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Canadian aluminum producers are concerned. The American administration would threaten to apply this new tax if its neighbor to the north refuses to reduce its exports to the United States. The objective is to defend American producers hard hit by the pandemic. If implemented, it would further disrupt the aluminum industry in Canada. The industry, which employs 11,000 people, is already suffering from the fall in prices and the drop in demand caused by the coronavirus crisis.

Canadian producers have already reduced their production capacity and plant closings are now being considered. Canadian authorities do not understand how the American administration could reconsider this file, which was closed just over a year ago. Indeed, in May 2018 Donald Trump had imposed customs tariffs of 10% on Canadian aluminum while the two countries were negotiating the free trade agreement which must replace from July 1 the NAFTA, the North American free trade between the United States, Canada and Mexico. He lifted them a year later. Analysts believe that the US administration uses intimidation tactics as usual. Ironically, according to the Bloomberg agency, the American administration would apply these customs duties from July 1, the date of entry into force of the new agreement. 

Unifor, Canada's largest private sector union, is calling on the government not to give in to American threats. Same call for firmness from the Aluminum Association of Canada. On the Canadian side, it is considered that the American industry is more a victim of the Chinese products subsidized by Beijing than the products of its neighbor to the north. 

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