Canadian Aluminum exports to the United States
Date: August 10, 2020
Classification: Unclassified
Fully releasable (ATIP)? Yes
Branch / Agency: CTB/CBSA
Issue: On August 6, 2020, the Trump Administration announced re-imposing a 10 per cent tariff on Canadian aluminum imports, citing national security concerns. The new U.S. tariff will be in effect as of August 16, 2020.
Proposed Response:
- Canada is a critical supplier of aluminum to U.S. manufacturers and Canadian aluminum does not undermine U.S. national security.
- Canadian aluminum strengthens U.S. national security and has done so for decades through unparalleled co-operation between the two countries
- The Canada Border Services Agency is contributing to a whole-of-government approach, led by Global Affairs Canada and the Department of Finance, in order to appropriately respond to any new tariffs on aluminum imports from Canada.
- The CBSA is being consulted as part of that 30-day consultation on the administration of the retaliatory measures. The CBSA will assess implications for its operations and adjust systems and procedures accordingly to ensure that any retaliatory measures are implemented appropriately.
- Aluminum prices have fallen due to the COVID-19 crisis, but not due to imports from Canada. Further, with the newly enforced Canada-United States-Mexico Agreement, there has been no influx in aluminum imports.
Background:
On June 23, 2020, media outlets began reporting that the Trump Administration is considering re-imposing section 232 tariffs on aluminum imports from Canada and that an announcement could come any day. The week of July 27, 2020, the U.S. Trade Representative informed the Deputy Prime Minister that the President of the United States (U.S.) has approved in principle the tariffs and will sign an order putting them in place in the coming days. On August 6, 2020, the Trump Administration announced re-imposing a 10 per cent tariff on Canadian aluminum imports. The new U.S. tariff will be in effect as of August 16, 2020.
In response to these measures and in accordance with the May 2019 Joint Statement by Canada and the United States on Section 232 Duties on Steel and Aluminum, Canada intends to impose surtaxes against imports of aluminum and aluminum-containing products from the U.S., representing a proportionate amount of Canadian aluminum products affected by the U.S. tariffs. These countermeasures will remain in place until the U.S. eliminates its tariffs against Canada.
Global Affairs Canada is the lead department on this subject. Global Affairs Canada and Finance Canada have prepared retaliatory measures that will take effect by September 21, 2020. A 30-day consultation on those measures has been launched and will close September 6, 2020. CBSA is being consulted as part of that 30-day period on the administration of the retaliatory measures. The CBSA is assessing implications for its operations and will adjust systems and procedures accordingly to ensure the retaliatory measures are implemented appropriately.
By way of background, on March 8, 2018, the President of the U.S. signed two proclamations to impose, for reasons of national security, a 25% surtax on imports of steel and a 10% surtax on imports of aluminum, which came into effect March 23, 2018. Canada, among other countries, received a temporary exemption from these surtaxes until June 1, 2018. On May 31, 2018, the U.S. announced that the temporary exemption from these tariffs would not be extended for Canada. On June 1, 2018, the U.S. imposed tariffs of 25% and 10%, respectively, on imports of steel and aluminum from Canada.
In response to these measures, on May 31, 2018, Canada announced its intention to impose surtaxes or similar trade-restrictive countermeasures against up to $16.6 billion in imports of steel, aluminum, and other products originating from the U.S., representing the value of 2017 Canadian steel and aluminum exports affected by the U.S. measures. These countermeasures took effect on July 1, 2018. On May 17, 2019, the U.S. and Canada announced an agreement to lift U.S. section 232 tariffs on Canadian steel and aluminum, as well as Canada's retaliatory countermeasures.
Contacts:
Prepared by: Sean Borg, Director, Trade and Anti-dumping Programs Directorate, 613-954-7397
Approved by: Mike Leahy, Executive Director, Commercial and Trade Branch, 613-960-7146
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