Minister of Finance Bill Morneau speaks to the media in Calgary.                                The Canadian Press/Jeff McIntosh

Minister of Finance Bill Morneau speaks to the media in Calgary. The Canadian Press/Jeff McIntosh

U.S. to slap steel and aluminium tariffs on Canada, Mexico

Canadian government retaliates with counter-tariffs

Both Rio Tinto and its BC Works operation in Kitimat are remaining tight-lipped about last week’s announcement by the U.S. that it would impose a ten per cent tariff on Canadian aluminium being exported to that country.

Montreal-based Rio Tinto media relations manager Claudine Gagnon said very little.

“We are reviewing the U.S. action and remain focused on reliably supplying our customers in North America,” said Gagnon, who is responsible for media liaison for Rio Tinto’s Canadian operations.

Rio Tinto BC Works spokesperson Kevin Dobbin echoed Gagnon’s statement.

“Rio Tinto is not giving interviews, as we are reviewing the U.S. action,” said Dobbin.

Rio Tinto is the biggest supplier of aluminium to the U.S., exporting nearly 1.4 million metric tons annually from its smelters in Canada, which amounts to nearly 75 per cent of its Canadian production.

Unifor national president Jerry Dias, however, was quite outspoken about the U.S. government’s decision.

“Make no mistake — this is a full-on trade war. The U.S. has systematically come after Canada’s aerospace, softwood, paper and now steel and aluminum industries,” said Dias. “Unifor fully supports the action taken by the federal government to fight back on behalf of Canadian workers.”

He was referring to tariffs imposed by the federal Canadian government on U.S. goods in retaliation for the tariffs imposed on Canadian aluminium and steel.

The tariffs are being imposed under Section 232 of the U.S. government’s Trade Expansion Act, citing national security concerns. The U.S. had previously exempted Canada from the tariffs while renegotiations around the North American Free Trade Agreement (NAFTA) were taking place.

“America didn’t get what it wanted at the NAFTA table so the Trump administration is using the absurd premise that imports from Canada constitute a security threat to America to lash out at Canada and Mexico,” said Dias.

“The U.S. steel and aluminum tariffs will impact everything from beer cans to cars, with consumers and workers on both sides of the border paying the price.”

Unifor represents more than 40,000 workers in the auto industry and an additional 4,000 members in the aluminum sector, with 1,000 at Kitimat’s BC Works and the remaining 3,000 in Quebec.

“Unifor will back all necessary retaliatory measures to defend our pulp, paper, steel and aluminum industries from unwarranted tariffs and to fight for the interests of all Canadian workers,” said Unifor Quebec director Renaud Gagné.

Aluminium Association of Canada president and CEO Jean Simard said the tariff will have a negative impact on the North American integrated aluminium value chain.

“The overall price of aluminium will increase, affecting small- and medium-size businesses both in Canada and the U.S. The consumers and companies that supply these consumers will suffer when prices go up as a result of these tariffs, ultimately undermining the competitiveness of the entire North American aluminum industry,” said Simard.

He said the U.S. should rather focus on the real issue at hand, namely China’s overcapacity.

“The 10 per cent tariff applied to the export of $USD 5,6 billion of our primary aluminium to the U.S. will increase the costs of the American downstream industry by more than $USD 500 million,” said Simard.

Canadian prime minister Justin Trudeau reacted strongly to news of the tariffs.

“Let me be clear – these tariffs are totally unacceptable,” said Trudeau on May 31, a day before the tariffs came into effect.

“The numbers are clear – the U.S. has a $USD 2 billion surplus in steel trade with Canada – and Canada buys more American steel than any other country in the world, half of U.S. steel exports,” said Trudeau. “That Canada could be considered a national security threat to the U.S. is inconceivable.”

He said the tariffs were an affront to the long-standing security partnership between Canada and the U.S. and required a strong response.

“As we have consistently said, we will always protect Canadian workers and Canadian interests,” said Trudeau.

Following on Trudeau’s speech, the Department of Finance announced that it intended imposing “surtaxes or similar trade-restrictive countermeasures” against up to C$16.6 billion in imports of steel, aluminum, and other products from the U.S., representing the value of 2017 Canadian exports affected by the U.S. measures. The tariffs are due to come into effect on July 1.

A 25 per cent tariff will be imposed on metal products, including such things as railway or tramway track construction material and line pipe of a kind used for oil or gas pipelines.

A 10 per cent tariff will be imposed on household items and food like roasted coffee, gherkins and orange juice.

“These countermeasures will remain in place until the U.S. eliminates its trade-restrictive measures against Canada. The countermeasures will not apply to U.S. goods that are in transit to Canada on the day on which these countermeasures come into force,” reads a statement on the Department of Finance’s website.