I’ve been perusing the U.S. Aluminum Association’s official reaction to U.S. President Donald Trump’s announcement that he intends to impose a 25 per cent tariff on Canadian aluminum. In its way, it’s a small masterpiece of political messaging. The whole idea of a U.S. tariff on Canadian aluminum, which ordinarily makes up 60 per cent of the entire American supply of the metal, flies in the face of a hundred years of industrial development, conscious and explicit partnership between the countries, and all logic. The U.S. defence industry is a particularly heavy user of aluminum, and Canada’s aluminum industry, built with plenty of American capital, is actually defined in U.S. law as being part of the U.S. “industrial base” for national-security purposes.
You might naively think that the U.S. aluminum industry, hooked up to Quebec like a blood-transfusion patient, would respond to the prospect of an aluminum tariff with horror and invective. (Trump tried to tariff Canadian aluminum in his first term, then backed off and exempted us when NAFTA/CUSMA renegotiations got underway.) But the United States has reverted to the courtly politics of 18th-century monarchies; and so, a trade association generates a press release that sounds pro-Trump while signalling dire desperation.
“The United States is a powerhouse in aluminum production and fabrication against global competitors,” the Feb. 1 press release begins. “That strength relies on imports of upstream aluminum, both smelted and scrap, from Canada.” The president of the association assures us that U.S. aluminum smelters and fabricators love Trump’s stance against unfair trade from “non-market actors,” which is another way of saying “China.” They love it so much that they invested billions in new capital equipment … “which requires an enormous amount of metal, much of which the U.S. industry must import from within North America.” Doh!
From an economic point of view, it’s hard to see how the incidence of U.S. tariffs on Canadian aluminum can fall anywhere except directly on American end-users, notably including the auto and defence industries. The U.S. smelters represented by the association say explicitly that ramping up output at existing plants to 100 per cent wouldn’t come close to meeting American demand. Building all-new infrastructure would take decades, zillions of dollars of investment and, of course, new mega-sources of energy of the kind that Quebec’s (and British Columbia’s) aluminum production was built right next door to, with very active American encouragement. And aluminum, of course, is already the subject of our species’ most successful metal-recycling project.
All tariffs are self-harming, and countervailing tariffs are self-harm doubled; this is the doctrine of the liberal religion of free trade, the doctrine to which I subscribe. But Trump’s aluminum tariffs seem especially crazy and stupid, so much so that I wonder if simply declining to push back will prove a politically acceptable course of action, even in Quebec.
The military-industrial complex will be bending Trump’s ear good and hard to give us another exemption. If you’re a “But Trump really believes in tariffs” person, the most likely outcome is just that our aluminum producers will carry on as before and pass along the tax to U.S. customers (and highly integrated Can-Am producers like Alcoa). Most of the time, when you set out to build a wall, you’re the one who is going to have to pay for it.
National Post
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