Reinstated aluminum tariffs increase U.S.-Canada trade tensions, recycled aluminum to feel effects

U.S. president Trump has signed a Proclamation reinstating a 10-percent tariff on non-alloyed, unwrought aluminum from Canada, beginning August 16, 2020. 

According to the U.S. government, certain types of aluminum entering the U.S. are depressing the industry there, including an 87% surge in imports of primary aluminum from Canada since May 2019, and the tariff will remain in effect "unless such actions [import volumes that harm U.S. national security] are expressly reduced, modified, or terminated." 

The  August 6th proclamation adds to the long-standing trade dispute with Canada over its aluminum exports to the United States, and comes despite the recent entry into force of the U.S.-Mexico-Canada Agreement ("USMCA") in July.  

According to Augustine Lo, an attorney at the international law firm Dorsey & Whitney who specializes in clients with U.S. export control matters, "Assuming this 10% tariff proceeds, it could significantly impact the aluminum market, from competing U.S. producers of primary aluminum, to producers of secondary aluminum from recycled goods that could compete with imported primary aluminum, and to downstream users of aluminum across all industries." 

In response to the announcement via Twitter, Canadian Prime Minister Justin Trudeau wrote, "In response to the American tariffs announced today, Canada will impose countermeasures that will include dollar-for-dollar retaliatory tariffs. We will always stand up for our aluminum workers. We did so in 2018 and we will stand up for them again now."

Deputy prime minister Chrystia Freeland also commented, "In the time of a global pandemic and an economic crisis, the last thing Canadian and American workers need is new tariffs that will raise costs for manufacturers and consumers, impede the free flow of trade, and hurt provincial and state economies."

"Canadian aluminum strengthens U.S. national security and has done so for decades through unparalleled cooperation between our two countries."