Canada To Slap Can$3.6 Bln Counter-tariffs On US Aluminum

Ottawa will hit American aluminum products with Can$3.6 billion (US$2.7 billion) in counter-tariffs, Deputy Prime Minister Chrystia Freeland said Friday, in response to "absurd" US levies announced on Canadian goods.

US President Donald Trump said Thursday he was reimposing a 10 percent tariff on Canadian aluminum, accusing Canada of flooding the US market with the metal.

"In imposing these tariffs, the United States has taken the absurd decision to harm its own people," Freeland told a news conference.

The deputy prime minister said Ottawa would hold 30 days of consultations with Canadian industry -- which employs 10,000 workers -- on which US items to target with tariffs.

A preliminary list published by the Canadian government includes soda and beer cans, bicycles, golf clubs and washing machines.

"We will not escalate and we will not back down," Freeland said.

"And we do hope that when Americans look at this list, they will understand why having a tariff dispute is a really bad idea."

The deputy prime minister also commented that a trade war in the midst of the pandemic would be devastating to both countries, and urged the Trump administration to reconsider.

"A trade dispute is the last thing anyone needs," she said. "It will only hurt the economic recovery on both sides of the border."

The US tariffs, which take effect August 16, are in response to what Washington called a 27 percent "surge" in aluminum imports from Canada over the past year which "threatens to harm domestic aluminum production."

"I have determined that the measures agreed upon with Canada are not providing an effective alternative means to address the threatened impairment to our national security from imports of aluminum from Canada," Trump said in his proclamation.

Ottawa has long rejected the national security concerns coming from a close ally, and Freeland on Friday doubled down, calling the notion "ludicrous."

Trump imposed punitive levies on imports of Canadian aluminum and steel in June 2018, and then relented as part of a free trade deal between the two countries and Mexico.

But he made the exemption conditional on Canada ensuring it would not "flood our country with exports and kill all of our aluminum jobs."

"Canadian aluminum producers have broken that commitment," Trump said on Thursday.

The Canadian aluminum industry disputed the US data, saying there was "no surge" and that shipments actually fell in recent months.

It noted that the United States consumes six times more aluminum than it produces and so relies on imports.

Attacking Canadian suppliers, it said, would open the door to increased aluminum shipments from China.

Auto parts manufacturers said they would be hit particularly hard by increased aluminum costs.

Seventy percent of aluminum in cars sold in North America must be sourced from the continent, under the new trade deal, known as the USMCA, which took effect on July 1.

Freeland said the United States and its neighbors should, under the new pact, be looking to "advance North American economic competitiveness, not to hinder it."

"At a time when its economy is suffering the deepest crisis since the Great Depression, any American who buys a can of beer or soda or a car or a bike will suffer," Freeland warned.

"In fact, the very washing machines manufactured at the Whirlpool plant (in Clyde, Ohio) where the president made his announcement yesterday, will become more expensive for Americans and less competitive with machines produced elsewhere in the world as a result of these tariffs."