President Donald Trump will reimpose tariffs on aluminum imports from Canada, three people familiar with the decision said Thursday, a move that will reignite trade tensions just a month after his signature North American trade deal took effect.
The U.S. will slap a 10 percent tariff on aluminum from Canada after it failed to reach an agreement on quotas on Canada’s exports of the metal, the three people told POLITICO.
The Trump administration could make the announcement as soon as Thursday afternoon or Friday, the sources said.
Trump’s move comes just a month after the president’s largest trade achievement — the replacement deal for NAFTA — entered into force on July 1. It was a much-celebrated date for officials in all three countries after more than two years of tense negotiations between the governments and in the U.S. Congress.
Trump had been considering reimposing the aluminum tariffs since mid-June, but held off at the insistence of U.S. companies and officials because USMCA was just days from taking effect, the people said.
In June, U.S. Trade Representative Robert Lighthizer acknowledged during a Senate Finance Committee hearing that there were recent surges in imported steel and aluminum, “substantially from Canada, some from Mexico.”
“It’s something of genuine concern to us and that we are looking at,” Lighthizer said.
Last year, the Trump administration exempted Canada and Mexico from its tariffs on imported steel, after living with the tariffs for more than a year. Trump imposed those tariffs on most countries around the world in 2018 in the name of national security.
But under the agreement to lift the tariffs, the U.S. said it could raise duties again after it conducts consultations with Canada and “in the event that imports of aluminum or steel products surge meaningfully beyond historic volumes of trade over a period of time.”
The U.S. trade chief said he was in talks with both countries about it, but it’s not clear if those talks have been part of formal consultations as outlined in the agreement with Canada on the issue.
Canada, for its part, can retaliate only in the affected sector — aluminum — if the tariffs are reimposed.
However, trade experts have argued that Canada could still push to retaliate with duties on other key U.S. goods, like agricultural products.
Ottawa previously imposed retaliatory tariffs against more than $12 billion in U.S. products, the bulk of which were American farm goods, in response to the U.S. tariffs on imported steel and aluminum. Those tariffs were removed when an agreement was struck in May 2019.
The push to reimpose tariffs stems from two U.S. primary aluminum producers, Century Aluminum and Magnitude 7 Metals, who argue that an increase in aluminum coming from Canada has led to aluminum prices plummeting.
But the broader U.S. aluminum industry, represented by the Aluminum Association, has pushed back and urged the Trump administration to not impose tariffs or quotas.
Lauren Gardner contributed reporting to this article.