Trudeau says U.S. tariffs on Canadian aluminum would hurt both economies

Click to play video: 'U.S. considers reinstating tariffs on Canadian aluminum'
U.S. considers reinstating tariffs on Canadian aluminum
WATCH: U.S. considers reinstating tariffs on Canadian aluminum – Jun 23, 2020

Prime Minister Justin Trudeau said Monday that increasing the price of aluminum for the United States is a bad idea for both economies.

Trudeau said his government has heard the “musings and proposals” from the U.S. about the possibility of more tariffs on aluminum, but did not confirm their validity. He said any “punitive actions” by the U.S. will simply “end up hurting Americans the same way they end up hurting Canadians.”

“What we’ve simply highlighted is: the United States needs Canadian aluminum. They do not produce enough, nowhere near enough aluminum in the States to fulfill their domestic manufacturing needs,” Trudeau said at his daily COVID-19 briefing in Ottawa on Monday.

“Therefore, if they put tariffs on Canadian aluminum, they are simply increasing the costs of inputs, necessary inputs, to their manufacturing base, which will hurt the American economy.”

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His comments stem from a report by Bloomberg, published last Tuesday, that said the U.S. plans to re-impose a tariff of 10 per cent on Canadian aluminum coming into the U.S. unless the Canadian government agrees to limit aluminum exports.

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The report said those tariffs on Canadian aluminum would go into effect on Canada Day — the same day the new Canada-U.S.-Mexico (CUSMA) trade deal comes into effect.

If the Trump administration does, in fact, impost a new round of tariffs on July 1, that would mark two years to the day since it last imposed steep tariffs of 25 per cent on Canadian steel and 10 per cent on Canadian aluminum. That move came as part of a bid to exert pressure in the renegotiation of the new NAFTA deal, now sometimes called CUSMA or USMCA.

In response, the Canadian government imposed an unprecedented round of tariffs worth $16.6 billion on a wide range of American goods, including steel and aluminum.

Click to play video: 'Trudeau praises new CUSMA trade agreement, coming into force on Wednesday'
Trudeau praises new CUSMA trade agreement, coming into force on Wednesday

The tariff fight was resurrected, in part, by U.S. trade representative Robert Lighthizer, who said in a testimony to the Senate Finance Committee earlier this month that recent “surges” in steel and aluminum exports, “substantially from Canada,” were contrary to the agreement that ended the year-long stalemate in May 2019.

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Despite repeated questioning last week, Canadian federal ministers refused to answer questions about whether they received notification of any such threat.

“We will continue to advocate for continued free and fair trade between our two countries in a relationship that has been extraordinarily beneficial to our two countries for many, many decades,” Trudeau said.

—with files from The Canadian Press and Global News’ Amanda Connolly

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