Canada optimistic about being exempted from proposed tariffs on steel and aluminium import

Canada, the biggest exporter of steel and aluminium to the U.S. is optimistic about being exempted from Trump administration’s crackdown on steel and aluminium import.

Though the U.S. Commerce Department didn’t mention any exemption for Canada in its report where possible tariffs and quotas were outlined, it acknowledged northern neighbour’s crucial relationship to the U.S. aluminium industry. Canada supplies about half of the U.S.’s almost 5 million-metric-ton aluminium deficit, and currently domestic smelters are not in a position to fill up that gap. For steel, however, there are exemptions for allies like Canada and Japan.

“If any country should be granted an exemption, I put my bet on Canada,” said Aluminum Association of Canada President Jean Simard.

Adam Austen, a spokesman for Canada’s Foreign Affairs Minister Chrystia Freeland, in an emailed statement emphasised the co-relation between Canada and the U.S. as a neighbouring countries and as key allies and partners, especially in the steel and aluminium sectors. Both these industries are highly integrated and supportive of North American jobs and manufacturing supply chains.  Austen said. Austen said, Canada will work towards maintaining that relationship while Trump makes his final decision.

U.S. aluminum producer Alcoa Corp., Aluminium Association and Rio Tinto Group are of the view that Canadian metal should be exempt from tariffs.  The issue of tariffs or quotas on metal imports comes amid North American Free Trade Agreement talks that are creating tension between the U.S. and Canada. The next round of talk is supposed to be held in Mexico soon.

“Certainly, any amount of poison being injected by the system makes it a lot more difficult to have a healthy continental economy afterward,” Perrin Beatty, head of the Canadian Chamber of Commerce, said.  “Everyone loses” if those recommendations are put in place, he added.

Though the aim of the tariffs is to boost U.S. output to at least 80 per cent of capacity, critics believe such actions have the risk of pushing up costs for domestic manufacturers and encouraging other countries to impose duties on various pretexts affecting the health of international market.

Canada hopes the U.S. administration will consider all sides before taking a final decision.