Trump walks back aluminum tariffs on Canada

President Trump backtracked on his decision to reimpose 10 percent aluminum tariffs on Canada on Tuesday, hours before Ottawa was set to announce retaliatory measures.

“After consultations with the Canadian government, the United States has determined that trade in non-alloyed, unwrought aluminum is likely to normalize in the last four months of 2020, with imports declining sharply from the surges experienced earlier in the year,” the office of the United States Trade Representative said in a statement.

Just last month, Trump said he would restore the tariff, which alongside levies on imported steel have plagued the U.S.-Canada trade relationship since early in his administration.

Trump withdrew the tariffs last May to pave the way for the United States-Mexico-Canada Agreement, his update to the North American Free Trade Agreement, only to bring back the aluminum tariff a month after the deal’s implementation.

But the administration says it has essentially replaced the tariffs with a monthly quota and that it will retroactively charge the import tax should too much aluminum be sold across the border.

The quotas amount to 83,000 tons in September and November and 70,000 tons in October and December, but Canada can exceed those limits by 5 percent without triggering a response.

Canadian Finance Minister and Deputy Prime Minister Chrystia Freeland praised the move at a press conference in Ottawa.

“The last thing that Canadians and Americans need now in the middle of this pandemic is a trade war,” she said.

Senate Finance Committee Chairman Chuck Grassley (R-Iowa), who has been critical of Trump’s trade policy, said the government should be focusing its trade concerns on China, not Canada.

“I’m glad tariffs will not be re-imposed on Canadian aluminum. It’s ridiculous to think that aluminum imports from our Canadian friends present a national security concern,” he said, referencing the national security justification Trump used to skirt Congress in imposing tariffs.

Business groups also breathed a sigh of relief.

“What American manufacturers need now is certainty that these tariffs won’t make another reappearance,” said Chamber of Commerce Executive Vice President Myron Brilliant. “Setting aside these threats once and for all will allow American job creators to focus on economic recovery.”