A little more than a month since the United States–Mexico–Canada Agreement (USMCA) entered into force on July 1, 2020, President Trump announced the re-imposition of aluminum tariffs on Canada. The 10 percent tariff was announced on August 6, 2020 at a Whirlpool factory in Ohio where President Trump is quoted as saying, “To be a strong nation, America must be a manufacturing nation…that means protecting our national industrial base.” He went on to accuse the Canadian aluminum industry of flooding the United States with exports that are killing U.S. aluminum-related jobs. The tariffs become effective August 16, 2020. Canada indicated it would be responding “swiftly and strongly” with counter-tariffs on American-made aluminum products. Specifically, Deputy Prime Minister Chrystia Freeland noted Canada would be imposing $3.6 billion in countermeasures. The products that will be subject to Canadian tariffs will be drawn from those listed HERE. The Canadian government will accept comments and general inquiries on this list through September 6, 2020. Comments should be addressed to fin.tariff-tarif.fin@canada.ca.
Many fear that this most recent protectionist action is a harbinger for the direction of the Administration’s trade policy regarding China, as Phase Two of a trade deal has yet to be fully outlined. A day later, after the announcement regarding Canadian aluminum tariff re-imposition, when asked about Phase Two of a U.S.-China trade deal, President Trump indicated he wasn’t even thinking about it and had many other things on his mind. Additionally, on the same day the President announced the Canadian aluminum tariff re-imposition, he issued a series of Executive Orders that basically ban two popular China-based social apps. Some believe this action will only escalate trade tensions between the two nations and further hinder the ability to agree upon additional trade terms. Both nations have scheduled a video conference for August 15, 2020 to review the implementation of Phase One of their trade deal and air any grievances. Many expect this to be test of an increasingly tense relationship.