It was only about a month ago that the new United States-Mexico-Canada trade agreement (USMCA) went into effect — and already, President Donald Trump has had to take action to ensure that all parties are engaging in fair trading practices.
Amid accusations that Canada surged its aluminum production to a level that depressed market prices in America, President Trump announced Thursday that he had signed an order reimposing a 10% tariff on Canadian aluminum imported to the U.S., CNBC reported.
The original tariff was suspended in mid-2019, likely as a show of good faith ahead of the passing of the USMCA, which was negotiated as a replacement to the outdated — and lopsided — North American Free Trade Agreement (NAFTA).
Trump follows through
According to CNBC, President Trump announced his latest order in a speech at a Whirlpool manufacturing plant in Ohio on Thursday. The order comes as part of six new campaign promises he is making to the American people for his second term in office, should he be re-elected, the fifth of which is a vow to use every economic tool at his disposal to ensure fairness and reciprocity in trade with other nations.
“As part of this commitment, earlier today I signed a proclamation that defends American industry by re-imposing aluminum tariffs on Canada,” Trump said Thursday, according to a transcript provided by the White House.
He went on: “Canada was taking advantage of us, as usual, and I signed it, and it imposes — because the aluminum business was being decimated by Canada. Very unfair to our jobs and our great aluminum workers.”
Trump said his administration had agreed months ago “to lift those tariffs in return for a promise from the Canadian government that its aluminum industry would not flood our country with exports and kill all our aluminum jobs, which is exactly what they did.”
“Canadian aluminum producers have broken that commitment, and the U.S. Trade Representative, Robert Lighthizer, has advised me that this step to re-impose tariffs is absolutely necessary to defend our aluminum industry,” Trump added, according to the White House transcript.
Canada’s aluminum problem
Coinciding with President Trump’s speech in Ohio, the White House released the text of the proclamation issued by Trump.
The proclamation recounts that the 10% tariff on Canadian aluminum was first imposed in March 2018 before ending in May 2019, albeit on the understanding that Canada would no longer flood the market and depress prices with a surge of imported aluminum.
Unfortunately, further monitoring of the situation revealed that Canada had indeed surged its export of aluminum to the U.S. almost as soon as the tariff was lifted, again causing a depression in the pricing for American-produced aluminum. That news prompted Trump to act.
Some people don’t like tariffs, but the reality is that tariffs are simply an economic tool that President Trump is unafraid to use to the nation’s advantage — and thank goodness for that.