Canada | United States Surtax Order (Aluminum 2020)


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On August 6, 2020, the United States announced the imposition of tariffs of 10% on imports of certain aluminum products from Canada. The United States (U.S.) tariffs took effect on August 16, 2020. In response, Canada announced its intention to impose countermeasures in the form of surtaxes of 10% against $3.6 billion in imports of aluminum and aluminum-containing products from the United States.

Background

On May 31, 2018, the United States announced tariffs under Section 232 of the Trade Expansion Act of 1962 on imports of Canadian steel (25%) and aluminum (10%), on the basis that the imports threatened U.S. national security. On the same day, the Government of Canada announced its intention to apply surtaxes on imports of steel, aluminum, and other goods from the United States, accounting for $16.6 billion in annual imports (i.e. the amount of affected Canadian exports). After the U.S. tariffs took effect on June 1, 2018, the Canadian surtaxes took effect on July 1, 2018, under the United States Surtax Order (Steel and Aluminum) and the United States Surtax Order (Other Goods).

On May 17, 2019, Canada and the United States reached an understanding through a joint statement to repeal the U.S. tariffs and Canadian surtaxes. The Canadian surtaxes and U.S. tariffs were repealed on May 19, 2019.

Under the Joint Statement, the United States may re-impose tariffs if imports of specific Canadian products surge meaningfully any time thereafter (i.e. 25% tariffs on steel or 10% tariffs on aluminum). Should the United States decide to do so, Canada may apply retaliatory surtaxes on imports from the United States within the affected sector (e.g. Canada may impose surtaxes on imports of U.S. aluminum and aluminum-containing products if the United States applies tariffs on Canadian aluminum).

On August 6, 2020, the United States announced that tariffs of 10% would be reapplied on imports of unwrought unalloyed aluminum from Canada. These tariffs took effect on August 16, 2020. Canada strongly disagrees with the U.S. tariffs, including because U.S. imports of unwrought unalloyed aluminum from Canada have not surged meaningfully, and that these imports do not pose a threat to U.S. national security.

In response to the U.S. tariffs, the Deputy Prime Minister announced the Government’s intention to impose countermeasures, in the form of 10% surtaxes, against $3.6 billion in imports of aluminum and aluminum-containing products from the United States, representing the value of Canadian aluminum exports affected by U.S. tariffs. Canada continues to advocate for the full and permanent removal of the U.S. tariffs.

Canada’s aluminum industry provides approximately 10 000 well-paying, direct jobs in primary aluminum production, and supports tens of thousands more in related downstream sectors.

Canada and the United States share a highly integrated aluminum market. Combined bilateral trade in primary and semi-finished aluminum products between 2017 and 2019 averaged CAN$11.1 billion annually.


CONTINUE READING ON: gazette.gc.ca

                   

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