Former President Donald Trump has already raised tariffs on steel and aluminum imports to 50 percent. He has argued that this approach will help boost U.S. manufacturing. At a rally, Trump rolled out the Nippon Steel of Japan and U.S. Steel partnership. The first event was held at U.S. Steel’s Mon Valley Works–Irvin Plant, just outside Pittsburgh. This proposal is a groundbreaking step toward a new trade policy. As Jonathan pointed out on the blog last year, Canadian officials and economists have sharply criticized it.
In March 2018, Trump initially imposed a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports under Section 232 of the Trade Expansion Act of 1962. He has justified these tariffs as necessary to protect national security, and that they would do things like revitalize American manufacturing. At the time, he argued that the tariffs would help return manufacturing jobs to America.
At the end of 2023, Canada provided almost a quarter of all U.S. steel imports. This is an important statistic as it really underscores just how interconnected the North American steel market is. It means that, on an average year, at least 24% of all steel used in America is import-based. Such a high dependency on Canadian steel creates long-lasting and damaging impacts of the reimposed tariffs.
In his recent rally, Trump admitted that he wanted to impose a 40 percent tariff. The weight of “the caucus” with him forced him to compromise down to a 50 percent rate. This possible $200 billion increase in tariffs has recurred fears of economic turmoil in both countries.
“Our steel and aluminum industries are coming back like never before.” – Donald Trump
During the original tariff implementation in 2018, these measures forced thousands of Canadians out of work and temporarily halted production across the country. Many American companies are still paying inflated costs due to these duties, according to a recent report by the Washington-based Tax Foundation. In the process, they’ve hemorrhaged an estimated 75,000 manufacturing jobs. Economists have roundly blasted the tariffs ever since for their negative impact on U.S. companies and consumers.
The Canadian steel industry has firmly and vocally opposed Trump’s plans to renew the tariffs. They have cautioned that these tariffs could have dire consequences like those disruptions experienced in 2018. Bea Bruske, President of the Canadian Labour Congress, said that these tariffs would bring dramatic consequences.
“This decision will shut us out of the U.S. market completely, devastating Canada’s steel and aluminum industry and threatening thousands of good-paying, unionized Canadian jobs.” – Bea Bruske
“These threats to increase the tariff are unacceptable.” Mélanie Joly, Canada’s Minister of Foreign Affairs, said in regard to the proposed tariff hike. Canada, she stressed, has long been a stable and trusted trading partner.
“The fact remains that Canada is a reliable and secure trading partner that supplies materials that sustain American jobs.” – Mélanie Joly
He added that challenging economic security by raising tariffs is bad for the economic security of both countries.
“Doubling the steel and aluminum tariffs to 50 (percent) is antithetical to North American economic security.” – Mélanie Joly
Canadian leaders are asking their federal government to strongly support this. They feel an arbitrary and capricious assault on their sectors is afoot. Bruske stressed the need for Canada to stand up for its economic interests.
“We need a government that is prepared to stand up for Canadian industries, invest in good union jobs, and protect our economic sovereignty in the face of growing international uncertainty.” – Bea Bruske
There’s been a shift in the legal backdrop surrounding Trump’s tariffs. As the U.S. Court of International Trade did at one point and then ultimately upheld Trump’s tariffs. They decided that he had overstepped his authority as granted under the International Emergency Economic Powers Act (IEEPA). A federal appeals court granted an emergency motion from the Trump administration, allowing the tariffs to remain in place temporarily.
Debates over the impacts of these tariffs are becoming increasingly contentious. Their potential impacts raise critical questions about our trade relationships and future economic stability across North America. Trump is touting this decision as a victory for American workers. Critics warn that it will decimate good jobs and increase costs for everyday consumers.
“This will be yet another BIG jolt of great news for our wonderful steel and aluminum workers. MAKE AMERICA GREAT AGAIN!” – Donald Trump
