Trump will tax imports of steel and aluminum

The US president took advantage of the passage to the White House of major industrialists to indicate that he announced next week the imposition of tariffs of 25% on steel and 10% on aluminum. Ottawa was quick to denounce this initiative and promised to oppose it.

The measure that Donald Trump wants to adopt is to support US producers and US employment. The White House, however, did not specify which countries would be affected by this upcoming measure.

This announcement could have important consequences for Canadian businesses and workers.

Canada is the largest exporter of steel and aluminum in the United States, taking into account the integration of the automotive and military-industrial industries. Last year, Canada exported about $ 9.3 billion worth of aluminum to the United States, and about $ 5.5 billion worth of steel.

For now, the Trudeau government does not know if this measure will affect Canada and awaits the details from the US administration.

That did not stop the Minister of International Trade, François-Philippe Champagne, from denouncing this decision by the Trump administration in the House of Commons in Ottawa.

Any tariff or quota or quota that would be imposed on our industry would be unacceptable. Such a decision would have repercussions on both sides of the border.

François-Philippe Champagne

The minister reassured Canadians that the government is monitoring the situation “very closely” and will protect the workers.

“We will always be ready to defend the interests of our steelworkers and our workers in the sector. We will always protect their interests, “said Champagne.

Foreign Minister Chrystia Freeland responded with a statement.

As a key ally of NORAD and NATO, as well as the largest purchaser of US steel, Canada would consider any trade restrictions on steel and aluminum to be completely unacceptable.

Chrystia Freeland

She points out that the United States has a surplus of $ 2 billion in the steel trade with Canada. Canada, she says, buys more US steel than any other country in the world, which accounts for 50% of US exports in the field.

In its view, it is “inaccurate to view trade with Canada as a threat to the national security of the United States”.

“If restrictions were to be imposed on Canadian steel and aluminum products, we will take the necessary steps to defend our commercial interests and our workers,” she promised.

A bad decision

For his part, Quebec Premier Philippe Couillard believes that Donald Trump misses the mark.

“It’s still a bad decision, a misguided decision of the Americans and that will hurt them, at least if not more than us. Why? Because aluminum, there is almost no production in the United States. The problem of the aluminum market is not Quebec or Canada, it is China. So, we are not addressing the real issue, “he said.

Philippe Couillard believes that the battle the Trump administration is waging about steel and aluminum will look like what happens with lumber.

The defense industry has warned the US presidency on aluminum tariffs because it is a very important strategic metal. So, it’s going to be the same as for the wood, where the ones who paid in the end are the American consumers.

Philippe Couillard

Europe reacts

The European Union (EU) also denounces Mr Trump’s intentions. European Commission President Jean-Claude Juncker said that the EU “will react firmly and proportionally to defend [its] interests”.

“We strongly regret this US decision,” said the head of the European executive, quoted in a press release, adding that the Commission would present “in the coming days a proposal for countermeasures against the United States, compatible with the rules of the WTO, to rebalance the situation “.

EU Trade Commissioner Cecilia Malmström also lamented that US measures “will have a negative impact on transatlantic relations and global markets”.

The United States is the largest steel importer in the world. Their imports are almost four times their exports, lamented the Minister of Commerce, Wilbur Ross.

The Trump administration unveiled in mid-February three scenarios to tax imports of aluminum and steel, highlighting the need to preserve national security and jobs in the United States.

The first option would be to tax all imports of these two sectors considered strategic, the second would propose an even higher taxation to some countries and the third would aim to implement quotas, said Wilbur Ross.


The White House appeared to be at odds over the announcement of tariffs, which eventually came with its meeting with US steel and aluminum producers.

After a rumor that the president is apparently determined to announce the tax amounts on Thursday, his team said there will be no announcement until next week.

I will promulgate them next week. And they will be applied for a long time.

Donald Trump

“You will have to rebuild your industries,” he told industry, adding that cheap imports into the US “are destroying our businesses and jobs.”

Mr. Trump has in principle until April 11 in the case of steel and until April 19 in that of aluminum to decide on measures for these imports, which he accuses of being subsidized and sold at prices below their production costs ( dumping ).

Ignored requests

Several people close to Mr. Trump have asked him to save Canada.

The Pentagon has issued a letter asking it not to target its allied countries. During consultations, several stakeholders urged the Trump administration to make an exception for Canada.

The United Steelworkers has members in both countries – it is even headed by a Canadian, Leo Gerard, who asks Washington to spare his country of origin.

To put Canada in the same boat as Mexico, China, India or South Korea […] does not make sense.

Leo Gerard
“Canada should just be excluded, period. We have an integrated economy. And if it breaks, the United States will pay a heavy price … Every time I have had the opportunity, I have tried to point out to the most influential decision-makers that Canada does not was not the problem when it comes to international trade. Doing something that could drive Canada away would be a disadvantage for [the United States], “Gerard added.


Donald Trump’s statements come as Chinese President Liu He’s economic advisor visits Washington. He was supposed to meet White House officials, but not Mr. Trump, US officials told AFP.

Any decision, especially against China, could be seen as a declaration of trade war. China, the second largest trading partner of the United States, has repeatedly warned that it will not sit idly by.

China has not yet commented on Trump’s decision, but has previously threatened to cut back on US soybean imports in retaliation.

Effects on the stock market

Wall Street ended sharply on Thursday, worried about potential trade implications between the United States and the rest of the world after Donald Trump announced hefty taxes on imports of aluminum and steel.

Investors fear that Trump’s move will prompt other countries to respond by setting up trade barriers for US exports themselves.

The Dow Jones closed down 1.68% or 420.22 points to 24,608.98 points, and the NASDAQ lost 1.27% or 92.45 points to 7180.56 points.

On the Toronto Stock Exchange, the S & P / TSX Composite Index closed at 15,393.95 points, down 48.73 points.

The aluminum industry in figures

Nine of the 10 aluminum smelters in Canada are located in Quebec.
About 90% of the 3.2 million tonnes produced in Canada comes from Quebec.
In Quebec, the aluminum industry generates 10,000 direct and 20,000 indirect jobs.
Almost 80% of Canadian production is exported to the United States.

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