Prime Minister Justin Trudeau urged U.S. President Donald Trump to drop his steel and aluminum tariffs on Canadian imports during the signing of the United States-Mexico-Canada Trade Agreement (USMCA) in Argentina.Trudeau said the tariffs remain a major obstacle to U.S. and Canadian prosperity, even under the new USMCA deal that both leaders signed with Mexico President Enrique Pena Nieto.
While at the signing in Buenos Aires, Trudeau stated “We will not rest while those barriers remain. Canada will be as relentless in meeting this challenge as we were in updating NAFTA.”
According to one Canadian company that sells vents, ducts, grills, pipe fittings and studs in both countries and operates manufacturing plants in Missouri and New Brunswick, it’s been a very difficult year. Steve Finlay, VP Canadian Sales for Imperial Manufacturing Group stated “We’ve had two price increases passed along to our customer base this year, which is unprecedented. Our US operation has no choice but to import certain products. And they got hit with the 25% tariff.”
Canada buys more American steel than any other country in the world, accounting for almost 50% of US exports. In 2017, about US $14 billion of steel was traded between Canada and the United States. Canada and the U.S. share a highly integrated aluminum market with combined trade of more than US $11.4 billion annually. About 84% of Canada’s primary aluminum production is exported to the United States, where it is used as an important input for further processing into products for US domestic and export markets.
The tariffs have been driving up the cost of furnaces, air conditioning units, water heaters etc. Buyers are now paying more for raw material, whether they are importing it with the tariff or from local sources. The hope is that now that the USMCA is signed, the parties can find a way to agree to remove the tariffs. It is anticipated that they will be reduced or eliminated, but when this will happen is anybody’s guess.