U.S. President Donald Trump has reimposed a 10% tariff on aluminium from Canada. The tariff had been initially imposed in 2017 and was removed in May of 2018.
Deputy Prime Minister Chrystia Freeland held a press conference on Friday saying Canada was going to fight fire with fire and match their tariffs “dollar for dollar.”
You would think Trudeau and Freeland would surround themselves with advisors who would help them do the right thing. Not so much with this lot.
The issue of aluminium is somewhat complicated. There are those that claim that since the U.S. lifted tariffs on Canadian aluminium in 2018, other countries like China, have been dumping their aluminium into Canada to avoid tariffs when it eventually goes to the States.
Bear in mind that 76% of all aluminium produced in Canada is exported to the U.S.. It is also helpful to bear in mind that 90% of Canada’s aluminium production comes from Quebec.
The Americans claim there is a glut of Canadian aluminium currently in the U.S. and there is no sign of it slowing down. This is true for the most part.
The Quebec producers didn’t want layoffs so they kept producing generic primary aluminium known as P1020. This they shipped to the only storage facilities that are cost effective, which are in the U.S. where the bulk of the product would end up eventually.
This “surge” of Canadian product caught the U.S. producers’ eyes and the matter was raised up the food chain ultimately to the U.S. Trade Representative Robert Lighthizer, who then raised the matter with the President and then re-imposed the tariff.
As with so many things and especially with complicated trade deals and perceptions, it depends on whose ox is being gored as to who is right in any of these things.
But, what is not helpful are positions such as those taken by Freeland or Ontario Premier Doug Ford.
“I just have to say how disappointed I am with President Trump right now. In times like this, who tries to go after your closest ally, your closest trading partner, your number one customer in the entire world? Who would do this? Well, President Trump did this,” Ford said.
What would be a lot more helpful is if someone in the Canadian government acted like an adult and picked up a phone and called Lighthizer and organized some talks to settle the matter.
You know, like grown ups do.
A tit-for-tat trade war with our largest trading partner and closest ally is counterproductive. In the first place, the U.S. economy is ten times the size of Canada’s. They could literally squash Canada, so why pick the fight?
A little diplomacy would go a long way in this. Trump is, after all, a deal maker. Find out what he needs to see to make the deal and negotiate.
A mutually agreeable solution should be able to be reached if only the Prime Minister or Deputy Prime Minister would get out of the sand box and live up to their responsibilities to the country as a whole.
Pick up the phone and make a deal.