February 27, 2018 | by    

Canada Likely To Pursue Exemption From Steel, Aluminum Penalties If President Decides To Impose Quotas, Tariffs

As Connecting the Dots reported last week, the U.S. Commerce Department has recommended that the president call for tariffs, quotas, or a combination of quotas and tariffs on all imports of steel and aluminum into the United States.

While the Commerce Department recommended an appeals process by which countries and companies could request that certain products be exempt, it did not recommend products from the United States’ North American trading partners be excluded from the penalties. (The Metals Service Center Institute had asked for that exclusion in its steel 232 and aluminum 232 written testimonies submitted to the Trump administration.) According to Bloomberg, the Canadian government will continue to argue that its exports should be exempt from potential tariffs and quotas.

Whether Canada actually will need to formally ask for exemptions remains unknown because President Donald Trump has not yet revealed whether he will act on the Commerce Department’s recommendations. The president is now reviewing the Commerce Department’s recommendations and has until April 11 to make his decision for steel imports and until April 19, 2018 to make his decision regarding aluminum imports. As the Commerce Department has explained, “The President may take a range of actions, or no action.” Additionally, “Action could include making modifications to the courses of action proposed, such as adjusting percentages.”

Based on a separate report in Bloomberg, however, it appears that President Trump is leaning toward imposing “harsh” penalties, specifically a 24 percent duty on steel imports and a 10 percent tariff on foreign aluminum. According to Politico’s “Morning Trade,” other members of his cabinet are likely to support these actions. Politico reported last week that U.S. Defense Secretary James Mattis supported the Commerce Department’s recommendation for tariffs and/or quotas. In a memo to Commerce Secretary Wilbur Ross, Mattis said, “DoD believes that the systematic use of unfair trade practices to intentionally erode our innovation and manufacturing industrial base poses a risk to our national security.”

In an op-ed published last week in the Pittsburgh Post-Gazette, Sen. Robert Casey (D-Penn.) and Sen. Ron Wyden (D-Ore.) also argued for tariffs or quotas.