Free Trade

Trump's New Tariffs on Canadian Aluminum Are Indefensible

One month after signing a signature trade deal with Canada (and Mexico), Trump just launched an unnecessary and counterproductive new trade war against America's northern neighbor.

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When President Donald Trump imposed 10 percent tariffs on imported aluminum in March 2018, it was (predictably) American aluminum-consuming companies that suffered the most.

Companies like Whirlpool Corp., for example. The appliance manufacturer—which had previously been a cheerleader for Trump's tariffs on imported washing machines—saw its sales and stock prices tumble in the months after Trump's aluminum tariffs took effect, as the import taxes added to the company's input costs. It takes a lot of aluminum to build a washing machine, after all.

That background is essential to understanding the weirdness that unfolded on Thursday evening when Trump announced—from the factory floor at a Whirlpool manufacturing plant in Ohio—that he was reimposing 10 percent tariffs on aluminum imported from Canada.

Those tariffs had been lifted in 2019 as Trump sought to negotiate the United States–Mexico–Canada Agreement (USMCA), which officially took effect last month. But with the new trade deal in place, Trump has quickly returned to his old tricks. "Canada was taking advantage of us, as usual," he said Thursday during a largely off-the-cuff speech at the plant. The new tariffs are slated to take effect on August 16.

Ostensibly, the justification for reimposing these tariffs is the claim that imports have increased dramatically in recent months. In reality, that's a bunch of nonsense. The Aluminium Association says the claims of a surge in aluminum imports "are grossly exaggerated." In fact, aluminum imports from Canada are below 2017 levels—the last year before Trump's first round of tariffs took effect.

And even if aluminum imports were increasing, that's not something to get upset about. The United States literally does not produce enough aluminum to meet its domestic needs, so imports are essential for supporting the 97 percent of American aluminum industry jobs that are in downstream production. And when more aluminum—or anything else—is traded back and forth between the United States and Canada, both countries benefit from the transaction. That's how trade works.

It's not exactly clear what Trump hopes the reinstated tariffs will accomplish, but the one thing that should be obvious is that American aluminum-consuming industries will once again be punished by the president's trade policies. The tariffs "will place greater financial hardship on U.S. vehicle parts manufacturers at a time when the industry is trying to recover from plant shutdowns and a declining economy," said Bill Long, president and CEO of the Motor and Equipment Manufacturers Association, in a statement issued Thursday.

In deciding to reimpose tariffs on Canadian aluminum, the Trump administration "failed to listen to the vast majority of domestic aluminum companies and users," said Tom Dobbins, president & CEO of the Aluminum Association, in a statement yesterday. And that's the reaction from the industry that Trump's measure is supposed to be helping.

In February, the heads of 15 of the world's largest aluminum companies sent a letter to the White House urging the president to resist calls for renewed tariffs on Canadian aluminum—an effort that came from just two companies, The New York Times reported at the time.

"The few companies that stand to benefit from reinstated 232 tariffs on aluminum have cherry-picked government data and omitted important context to build their case, which unfortunately won the day," said Dobbins.

Politically, tariffs on Canada don't make much sense either. At the very least, Thursday's announcement undermines one of Trump's biggest accomplishments on the trade front: the USMCA. Canadian Prime Minister Justin Trudeau announced on Twitter that his government would immediately retaliate.

More generally, the abrupt turn against a close ally and major trading partner with whom the U.S. had just signed a major trade deal signals to the rest of the world that Trump's deals aren't to be trusted.

"If the U.S. walks back on its trade commitments, how can it criticize China for doing the same?" The Wall Street Journal editorial board opined today. "The aluminum tariff is Mr. Trump at his policy worst: He hurts U.S. industry and consumers, while telling America's friends that his word on trade can't be trusted."

Indeed, it's difficult to find any logical explanation for why Trump would pursue a policy that will increase costs for American consumers and businesses in the middle of a major economic downturn.

"These tariffs will raise costs for American manufacturers, are opposed by most U.S. aluminum producers and will draw retaliation against U.S. exports—just as they did before," said Myron Brilliant, vice president and head of international affairs for the U.S. Chamber of Commerce, in a statement that sums up the bizarre and counterproductive déjà vu of Thursday's announcement.

Is it tone-deafness? Is it willful ignorance? Maybe a little of both, mixed with the fact that Trump is a one-trick pony who still believes—despite a two-year-long real-world experiment showing otherwise—that tariffs will fix America's economic ailments.

That he would announce this new policy while literally standing on the factory floor of a business that the policy will materially harm is the cherry on top of this nonsensical milkshake. It also might be the most perfectly apt metaphor for Trump's inept and incoherent trade policy: one that he thinks is helping American manufacturing while it actually does the exact opposite.

NEXT: Trump Is Trying To Take Away Americans' Access to Popular Apps by Executive Order

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  1. It is indefensible.

    This has gotta be election year stuff–about swing voters in the swing state rust belt.

    It’s our fault.

    We [libertarian capitalists] failed to persuade enough of our fellow Americans to oppose this kind of thing, and these are the consequences.

    Persuasion is what you’re supposed to be good at, Reason.
    You wasted all that time hammering Trump when you should have been addressing the issues. Stop lollygagging. Get to work. Chop chop!

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    2. No one can do anything about the tariffs, except perhaps browbeat Trump on Twitter. Presidents unilaterally imposing tariffs without authorization from Congress needs to be examined.

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    3. You wasted all that time hammering Trump when you should have been addressing the issues. Stop lollygagging. Get to work. Chop chop!

      But FFS Trump probably actually believes that you don’t have to use a driver’s license to buy groceries!

  2. We signed a trade deal and are surprised when trade increases? What was the point of the trade deal?

  3. Many researchers have, for years, linked aluminum to Alzheimer’s disease. Perhaps this can explain Trump’s obsessing over aluminum imports?

    1. He’s trying to keep Joe Biden coherent enough to get through the election. No excuses for dropping out.

  4. Aluminum imploding!

  5. Trump is fixating one stopping all trade. He’s like some 19th century protectionist.

    In any case, it’s time for Congress to do it’s job and take this power away from the president. Unilateral international trade decisions in the hand of a single person is fucking nuts. Congress gave him that power, they can take it back.

    1. Unilateral international trade decisions in the hand of a single person is fucking nuts. Congress gave him that power
      That makes sense. What is the relevant law? Congress has become far too comfortable. This pandemic and their unwillingness to even show up to the job is the latest in a pattern that Congress does not take it’s responsibility seriously. These clowns have voted to pay themselves a fortune, whilst ducking as much responsibility as possible.


  6. The United States literally does not produce enough aluminum to meet its domestic needs, so imports are essential for supporting the 97 percent of American aluminum industry jobs that are in downstream production.

    And, if you wanted to change that (however wrongheaded) what would be one action one might take to achieve that goal?

    If you answered ‘cut back EPA regulations on mining’ you are apparently smarter than Trump.

    But I bet mining states will like the Chinese vengeance a lot better since it’s a twofer: revenge and incentivized domestic production. I doubt they care much about negative effects, too.

  7. Although Boehm unfortunately hit his word limit before he could mention this, there is an even more compelling argument that tariffs are bad: they hurt Charles Koch, the billionaire who funds Reason.com. Because of Drumpf’s disastrous high-tariff / low-immigration policies, Mr. Koch’s net worth has collapsed to an unacceptable $55,600,000,000.

    Only a Joe Biden victory will help our benefactor get back where he belongs — in the top 10 richest people on the planet, instead of barely in the top 20.

    #HowLongMustCharlesKochSuffer?

    1. lol hey Google find me a veep

  8. Fuck now the price of Moosehead will skyrocket.

    1. Doesn’t affect me – all of my clocks are digital.

    2. Democrats declared wuhanvirus a national emergency, so Trump is cutting off spyware from China.

      Democrats always want America to fight wars with one hand tied behind our backs.

  9. Newsflash Reason- they’ve been indefensible from the start for the sole reason that the President can only levy tariffs for national security reasons. If we had a Congress worth half a shit, they would’ve levied their power to block this bullshit but this is what we get.

  10. It’s almost like it’s not about the price of a washing machine.

  11. It’s a 10 pct tariff jeez calm down Francine. Why does reason act like trump murdered their family each time there’s a change in some policy. I would hazard a guess Koch is losing money and his paid shills gotta whine about it? Or is it just millennial overreaction to every goddamn thing he does. He’s not just hitler he’s Super mecha robot Godzilla hitler!

    1. Don’t calm him down.

      I only clicked on the Boehm article to drink deep of his tears. Delicious.
      #AmericaFirst

  12. “Canada was taking advantage of us, as usual,” he said Thursday during a largely off-the-cuff speech at the plant.

    A. Trades are voluntary and both parties come out better. No one is taking advantage of anybody.

    B. Canada is not trading with anybody. Canadian people and business are.

    C. Who is this “us”? Has Trump got a frog in his pocket, and have they been buying Canadian aluminium?

  13. It literally makes no sense for possibly the two most integrated economies and cultures in the world to engage in tit-for-tat protectionism. It’s petty and unproductive.

    We share common defense programs (NORAD), customs perks (NEXUS) and a bunch of other things. In fact, the biggest lie for me about ‘free trade’ was that it wasn’t free enough.

    Bad move Donnie.

    1. dude stop taking advantage of us as usual.

      1. Imagine being scared of Canadians!

        1. Robert. Alan. Probert.

          1. Who wouldn’t be of him?

        2. Trudeau Jr’s dad was a frightening Marxist asshole.

  14. I expect there is a backstory here that boehme is uninterested in digging into.

    Canada has a long history of protectionist actions where they could get away with it. Considerering the bad blood between the two administrations, this reeks of being a tit for tat retaliation. Doesnt make it right, but context does matter. But of course, not to boehm

    1. Trudeau is a shit head.

      Yeh, our dairy industry for example.

      1. Softwood lumber. That’s been going on since I was young enough to believe I could get chicks.

        1. Lol. The fight of the 80s!

    2. There is a further back story which you seem uninterested in — free trade, individualism, all that liberty crap which seems to whooosh right over your head.

      Free trade, even unilateral one-sided absolute free trade, has been shown many times to be better than any managed trade deals.

      Trade is between people, not countries. Where does anybody get the moral authority to restrict or manage anybody else’s private business?

      1. What part of “doesnt make it right” do you not understand? At what point did i defend the tariff?

        I was pointing out the lazy cutnpaste rant the boehm spewed with zero backstory because he is so blinded by irrational tds. As if trudeau isnt more of a statist, protectionist then Trump. But you wont even see the hacks here discuss the far more rampant antifreetrade behaviors outside our borders or the ramifications of that bs.

    3. Trump is no fan of Canada, it’s an election year, and his numbers are sagging. Trump probably thinks protectionism makes him very popular with the blue collars.

      1. It might actually.

        The Canada-U.S. softwood lumber dispute has become one of the most enduring trade disputes between both nations. Over the past 25 years, the United States lumber industry has frequently sought U.S. government restrictions on Canadian softwood lumber imports through the application of U.S. countervailing duty and antidumping laws – laws that allow the imposition of import duties when a U.S. industry is allegedly harmed by subsidies in the exporting country (countervailing duties), or by dumping, which is when a U.S. industry is allegedly harmed by imported products sold at prices that are lower than the cost of production or lower than prices in the domestic market (anti-dumping duties).

    4. You can count on Boehm, and Reason generally, to provide All the News that Fits the Narrative.

      After a thousand articles that made my spider sense tingle enough to track own the News that didn’t Fit the Narrative, I now just assume they’re lying all the time.

      I’m sure they’re not *always* lying. *Sometimes* the facts must fit The Narrative. But I figure I’m batting at least 90% by assuming they lie in every article.

  15. Softwood Lumber was my band name in college.

    1. I know I hit that reply button. I blame Reason.

    2. Or was that your nickname?

      1. “Weeping like the mighty willow…”

  16. Trump does some random shit because he’s bored and can’t go 12 minutes without stirring up some shit. Why are you looking for any deeper meaning in his actions?

    1. I had McDonalds for lunch. One thing Trump is right about is you can trust fast food more than restaurants. Had some bad experiences with carry out lately.

      I was bored so looked up his McDonalds eating habits. He has egg McMuffin and hash brown for breakfast. His dinner order is impressive. Two Big Macs, two fillet- o-fish and fries. Now that is some eating there.

      There was a point but I can’t remember what it was.

  17. You can count on Boehm, and Reason generally, to provide All the News that Fits the Narrative.

    After a thousand articles that made my spider sense tingle enough to track own the News that didn’t Fit the Narrative, I now just assume they’re lying all the time.

    I’m sure they’re not *always* lying. *Sometimes* the facts must fit The Narrative. But I figure I’m batting at least 90% by assuming they lie in every article.

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  19. Boehm is so dumb. He thinks washing machines are built using massive amounts of aluminum.

    Washing machines do have aluminum in them but the largest portions of materials include stainless steel and plastics. Any search of washing machines materials will list materials.

    unreason is such a joke.

  20. If only lefties like unreason staff would let the USA return to tariff based revenue to solely pay for the federal government, America would have a tiny and limited federal government.

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  23. “The United States literally does not produce enough aluminum to meet its domestic needs,”

    I get the impression that Reason militantly does not understand what is going on here.

    The US is enmeshed in a web of commerce. Normally that’s a very good thing! “If goods do not cross borders, armies do.”, relative advantage, economies of scale, yada yada yada. All that stuff is true, in normal times.

    But the US is also deep in debt, and getting deeper faster all the time. You can’t tell WHEN that will end with a crash, but every bit of economic history says it eventually will.

    At some point, and we won’t have much advance warning at all, our currency will stop being accepted, people will stop loaning us money, and our trade deficit will drop to zero overnight, and NOT in a good way.

    When that day comes, the more self-sufficient our economy is, the better, because anything we obtain from other countries will come dearly indeed. The more self-sufficient we are, the less our standard of living will drop, and the faster we’ll climb back out of that pit.

    Trump is working hard to make the country more self-sufficient, even if accomplishing it hurts. If we weren’t teetering on a mountain of debt, that would be stupid. But we are, and so it isn’t.

    In 2016 I used to say that one of the biggest reasons to vote for Trump was that he had experience taking large institutions through bankruptcy, and that, sadly, was relevant to being President. I wasn’t joking. This is part of that: He’s positioning us to recover after the crash.

  24. Almost the only time that Trump has told the truth is when he called himself the “Tariff Man,” aka the Tax Man. Trump is the spendingest and taxingest tax and spend NYC Democrat ever to plague America, and his lying about being a Republican is letting him get away with it.

    “The primary reason for a tariff is that it enables the exploitation of the domestic consumer by a process indistinguishable from sheer robbery.” – Albert Jay Nock

  25. Slapping a 10% tariff on Canadian aluminum is mild compared to a 25% steel tariff so putting things in perspective such a tariff could help balance the inequity that in 2018 Canadian aluminum production outpaced U.S. aluminum production by a ratio of 3.2 to 1. Determining how much aluminum U.S. needs to import to meet it’s domestic demands and then placing some import volume restriction on Canadian aluminum might be an alternative solution. One big question that looms is: What can be done to ramp up U.S. production of aluminum and thus create more U.S. jobs so there is less reliance on imported aluminum ?
    This tariff action by Trump may also be a publicity stunt to appeal to voters on the “Buy American-Keep Jobs In America” stance.

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