March 1, 2018 4:32 pm
Updated: March 1, 2018 9:30 pm

Trump’s tariff announcement leaves Canadian steel, aluminum producers in limbo

WATCH: U.S. President Trump may finally have started out an all-out global trade war. David Akin has more on the potential impact on Canada.


Canadian businesses were left reeling on Thursday as U.S. President Donald Trump confirmed that his administration will impose steep new tariffs on aluminum and steel imported into the United States.

But even as politicians in Ottawa sought to reassure producers that they’d have their backs, uncertainty swirled around whether the tariffs would even apply in Canada at all.

The planned tariff on steel will be most punishing, at 25 per cent. Trump is promising a 10 per cent tariff on aluminum.

WATCH: Trump says Tariffs on Canadian solar panels has revived U.S. industry

Both tariffs are potentially disastrous for Canada, which is the leading source of non-American steel and aluminum. A full 16 per cent of imported steel in the U.S. comes from north of the border.

The Canadian Steel Producers Association responded to Thursday’s announcement with a tweet touting the “evenly balanced” U.S.-Canada steel trade.

For weeks now, Canadian officials, American officials and businesses on both sides of the border have been pushing hard for an exemption that would shield Canada from the new tariffs. All Trump said Thursday was that he’d sign off on the changes “next week,” and that they will last “for a long period of time.”

WATCH: Donald Trump confirms that tariffs will be imposed on steel, aluminum imports.

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There was no mention of exemptions. In the hours afterward, the Canadian government appeared unable to confirm whether an exemption might be forthcoming.

‘In shock’

“Our economy is a lot more diversified than it ever has been but we still have hundreds of manufacturers in steel that employ 10,000 people in Hamilton,” said Keanin Loomis, president and CEO of the Hamilton Chamber of Commerce.

“That represents about $2 billion in local procurement, and conservatively that means there are about 30,000 other jobs that are reliant upon the steel industry here in Hamilton. Just in Hamilton.”

WATCH: Liberals say Trump tariffs on steel, aluminum ‘unacceptable’

Hamilton produces about a third of the Canadian steel imported to the U.S., he added. ArcelorMittal Dofasco, the biggest steelmaker in the city, will be “severely impacted.”

“Obviously we are in shock. And certainly hope that as things go forward, that the Canadian government can work hard to get an exemption for Canada.”

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In the House of Commons on Thursday afternoon, International Trade Minister François-Philippe Champagne called any imposition of the tariffs on Canada “unacceptable.”

“Any such decision would have an impact on both sides of the border,” Champagne said in response to a question from Conservative MP Lisa Raitt.

“As you would expect, we are following this situation very carefully … we will stand firm for Canadian workers.”

LISTEN: Ian Lee, associate professor at Sprott School of Business at Carleton University, weighs in

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During a press conference in Montreal held just before Trump’s announcement, Prime Minister Justin Trudeau reiterated that Canada and the United States “have a relationship unlike any two countries in the history of the world.”

“The idea that Canada could be a trusted Five Eyes partner, collaborating on a broad range of security and defence issues on a daily basis, but seen to be somehow not a trusted partner to sell steel is a little bit silly, to be frank,” Trudeau said.

The prime minister added that he is looking forward to “a positive outcome.”

READ MORE: Canada hopes for leniency as Trump threatens to impose global steel tariffs

But one other thing Ottawa needs to keep in mind, Loomis noted, is that regardless of whether Canada is granted an exemption, Trump’s decision will mean there will be 12 million tonnes of steel sourced from other countries like South Korea that, instead of ending up in the U.S., will be looking for a new home.

“Now we are going to have to harden our borders, and make sure that the government is much more proactive in preventing this steel from finding a home in Canada and threatening our domestic market,” he said.

The new tariffs could also throw a wrench into the ongoing renegotiation of the North American Free Trade Agreement (NAFTA). The talks between Canada, the U.S. and Mexico have been tense at times, and are now in their seventh round with no sign of a breakthrough.

– With files from David Akin

© 2018 Global News, a division of Corus Entertainment Inc.

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