Ottawa Vows Retaliation After U.S. Reimposes Tariffs On Canadian Aluminum

It looks like the U.S. and Canada are headed for a new trade war.

The Government of Canada is vowing to impose retaliatory tariffs on American products after U.S. President Donald Trump announced that he is restoring an import tax on raw aluminum from Canada later this month.

"In response to the American tariffs, Canada intends to swiftly impose dollar-for-dollar countermeasures," Deputy Prime Minister Chrystia Freeland said in a written statement She called Trump's decision to reimpose tariffs on Canadian aluminum, citing national security concerns, "unwarranted and unacceptable."

Freeland noted that the new Canada-United States-Mexico Agreement that replaced NAFTA went into force on July 1, including a provision that ensures 70% of aluminum purchased by North American automakers must be produced in North America. Details of the counter-tariffs Canada intends to impose are to be announced "shortly," the statement said.

The U.S. previously imposed the same tariff between June 1, 2018, and May 17, 2019, along with a 25% import tariff on Canadian steel. Canada retaliated with $16.6 billion in tariffs on U.S. products, including ketchup, ballpoint pens, licorice, orange juice, whisky and toilet paper.

At the time, Canada focused on products that would cause pain in electoral districts held by key Republicans, something that could be done again given the U.S. election is only three months away.

During a speech at a Whirlpool manufacturing plant in the battleground state of Ohio, Trump accused Canada of breaking a promise not to flood the U.S. market with the Canadian metal.

"Canada was taking advantage of us, as usual," Trump said. "The aluminum business was being decimated by Canada, very unfair to our jobs and our great aluminum workers."

Trump said on the advice of U.S. Trade Representative Robert Lighthizer he signed a proclamation earlier in the day to put a 10% tariff back on raw aluminum from Canada as of August 16.

Canada's aluminum industry immediately called for "reasonable" but "painful" retaliatory tariffs.