Trade

Trump Restarts His Trade War With Canada

JM Ashby
Written by JM Ashby

In a move that no one was asking for, Trump reimposed tariffs of 10 percent on Canadian aluminum products last week.

In the Trump regime's own words, they reimposed tariffs because Americans are buying Canadian aluminum.

That's it.

The text of Trump’s proclamation says that Commerce Secretary Wilbur Ross informed Trump that Canadian aluminum imports “increased substantially” in the months after the decision to lift the tariffs in mid-2019.

That so-called surge “threatens to harm domestic aluminum production and capacity utilization,” the proclamation said.

I mean, yes, of course imports increased after we lifted the artificially inflated, non-market price we placed on them. That's how supply and demand works.

Canadian officials responded on Friday by announcing retaliatory tariffs on American goods.

“Canada will respond swiftly and strongly,” Canadian Deputy Prime Minister Chrystia Freeland said at a news conference.

“We will impose dollar-for-dollar countermeasures in a balanced and perfectly reciprocal retaliation,” she said. “We will not escalate and we will not back down.”

Freeland said Prime Minister Justin Trudeau will spend the next 30 days consulting with Canadian citizens and businesses on a broad list of aluminum-containing products. Canada’s new duties on U.S. imports, she said, will total 3.6 billion Canadian dollars ($2.7 billion).

Imposing tariffs on Canadian metal will only hurt, not help, the American economy at a time when our economy is figuratively and literally on a ventilator. Setting up new barriers to recovery by increasing the cost of basic commodities necessary for manufacturing and construction is not going to help anyone and even the American metal industry is opposed to it.

The American Aluminum Association released a statement opposing Trump's decision.

"The Aluminum Association is incredibly disappointed that the administration failed to listen to the vast majority of domestic aluminum companies and users by reinstating Section 232 tariffs on Canadian aluminum," the industry group said in a newsletter to members.

"This ill-advised action on a key trading partner undermines the deal's benefits at a time when US businesses and consumers can least afford it," the association added, in reference to the US-Mexico-Canada Agreement, or USMCA, and the recent economic turmoil caused by the coronavirus pandemic.

The Association is referring the fact that Trump is doing this on behalf of a small handful of politically well-connected companies that can't compete on the open market because they have shitty business models and practices, not because Canadian metal is too cheap.

With Canada's significantly higher labor and environmental standards, significantly higher minimum wages, and higher taxes, if American firms in the Midwest can't compete, they deserve to go out of business. They don't deserve to be propped up by hurting everyone else.

We can add this to the incredibly long list of things the hypothetical Biden administration will have to undo if the economy is ever going to fully recover in the next decade.

If the Trump regime believes Canadian business practices are unfair even under the terms of the USMCA, then perhaps, by their own standards, it was a shitty deal.

  • muselet

    When the majority of companies argue their industry doesn’t need tariffs to protect it from foreign competition, it’s safe to assume they’re (mostly) telling the truth.

    Of course, these tariffs are being reimposed so Donald Trump can present himself to his voters as Big! Strong! Manly!, not for any economic reason.

    That’s how supply and demand works.

    Yes it is, and that’s something to remind Rs of the next million times they shriek and wail about Ds paying insufficient obeisance to The Free Market (hallowed be its name!).

    –alopecia