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U.S. may soon impose aluminum tariffs on Canada: sources
OTTAWA -- CTV News has confirmed that the U.S. is once again considering slapping tariffs on aluminum imports coming from Canada.
An announcement is possible in the coming weeks, according to two Canadian sources.
Bloomberg News first reported the possibility of the U.S. slapping another set of tariffs on Canada on Monday night. The tariffs would fall under Section 232 of the U.S. Trade Expansion Act, and the threat comes amid U.S. claims that their aluminum market is being flooded by Canadian product.
Should the U.S. decide to re-impose tariffs on Canada, it would re-open a trade rift between the two countries that had been healing since similar tariffs were lifted just over a year ago. The trade spat saw tariffs lobbed back and forth between the two countries, including Canada's decision to slap tariffs on a wide array of U.S. products including quiche, mayonnaise, and toilet paper.
When asked about the tariff threat, Deputy Prime Minister Chrystia Freeland's office said in a statement that the government "will always defend Canada's aluminum sector and its workers."
"The free flow of goods and services, including aluminum, is important for jobs and economic growth in both of our countries. We firmly believe that our aluminum exports do not harm the US market. We are emphasizing this in our ongoing conversations with our American partners," the statement read.
Treasury Board President Jean-Yves Duclos also defended Canada's track record with managing its aluminum supply during a Tuesday press conference.
"The use and the production of aluminum in Canada is no harm and no threat to our American friends and neighbours…in fact, the free flow of aluminum across our border is a mutual benefit to both countries and workers in both countries," Duclos said.
The United States had previously hit Canada with steel and aluminum tariffs in May 2018, in the middle of new NAFTA negotiations. The tariffs remained in place for a year, during which time Canada fired back with dollar-for-dollar countermeasures on American steel, aluminum, and a surtax on other goods.
Canada and the U.S. issued a joint statement announcing the decision to lift the tariffs in May of last year, confirming that the countries had agreed to lift all the tariffs and terminate the World Trade Organization litigation underway - which Canada had launched after slamming the U.S. tariffs as "punitive," and "an affront" to Canada-U.S. relations.
As part of the deal to put an end to the two countries lobbing tariffs at one another, Canada agreed to introduce better regulations and monitoring to ensure the global oversupply of aluminum isn’t being dumped within its borders.
"That was put into effect on the first of September 2019 and since then, we have not only respected our commitment, but have indeed with our business partners made sure that those regulations and that those resources would be there to protect against aluminum dumped from abroad," Duclos said.
The agreement to lift tariffs came amid indications that new NAFTA trade talks were moving in a positive direction. That trade agreement has since been ratified by all three countries — Canada, the U.S., and Mexico — and comes into effect on July 1.
Duclos noted that with the new NAFTA coming into effect, an agreement within the deal regarding aluminum use also comes into force — one that requires 70 per cent of the steel and aluminum used in auto production to be purchase in North America.
"[This] reinforces even more the interest of Canada and the United States to work together," Duclos said.
The minister also called the tariffs introduced last year "unfair" and "illegal."
When the tariffs were lifted last year, Trudeau called it a "good day for steel and aluminum workers right across the country."
DUCLOS VOWS TO DEFEND CANADIAN INTERESTS
Should the United States bring its threat to fruition and the country opts to go ahead with the tariffs, Duclos said Canada will defend its workers.
"We will always defend the interests of aluminum workers using all the tools available," he told reporters on Tuesday.
"The tools we have now are very substantial. We have a new NAFTA which is going to take effect in a few days which is going to make it even more important that the flow of aluminum is maintained to continue building a stronger automobile industry on both sides of the border."
His comments come amid criticism from the opposition. Conservative MP Randy Hoback said in a statement that "Conservatives do not have confidence in this Liberal government's ability to go to bat for our aluminum industry."
Hoback added that the government "must be prepared to retaliate on any tariffs placed on Canadian aluminum and follow through on that threat."
Duclos said multiple times that Canada plans to push back on any protectionist sentiment.
"We all are aware of the protectionist attitude and actions of the last few years in the context of our relationship with the U.S.," he said.
"This being said we use every opportunity to make our neighbours and friends and trade partners understand it is to the joint benefit of everyone to keep the flow of goods and services open and strong because we all gain from that. Our businesses become and remain more competitive if we succeed in decreasing the barriers that could be imposed under protectionist views."
With files from CTV's Rachel Aiello