Free Trade

U.S. Withdraws Foolish Threat of New Tariffs on Canadian Aluminum

First the Trump administration told us aluminum imported from Canada was a national security threat. Then it suddenly decided it's not a big deal.

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One of the more bizarre episodes of President Donald Trump's trade war—and there are plenty of contenders—came to an abrupt end on Tuesday afternoon when the United States backed down from a threat to impose new tariffs on aluminum imports from Canada.

"This was a day where common sense prevailed," Chrystia Freeland, Canada's deputy prime minister, said at a press conference on Tuesday where she announced that Canada would also drop its plans to retaliate against the threatened tariffs.

Indeed, much of American trade policy over the past few years has been marked by a shortage of common sense. But slapping new tariffs on aluminum imported from Canada—and doing so just weeks after the United States and Canada (and Mexico) signed a new trade agreement—was always completely indefensible.

Officially, the new tariffs were a response to what the White House called, at the urging of lobbyists for two domestic aluminum manufacturers, a surge in aluminum imports from Canada. That claim was a bunch of nonsense, but even if it were true, it wouldn't be something to be upset about. The United States does not produce enough aluminum to meet domestic needs, so imports are essential for supporting the 97 percent of American aluminum industry jobs that are in downstream production. No wonder there was widespread opposition to the tariffs from the American aluminum industry—you know, the very industry that these tariffs were supposed to be protecting.

Unofficially, the entire episode is a good demonstration of how unmoored from reality the Trump administration's views on trade have become. Like it did in 2018, the White House was planning to use Section 232 of the Trade Expansion Act of 1962 to impose tariffs on Canadian aluminum in the name of national security.

In fact, Trump's August 6 proclamation announcing the renewed (and now canceled) tariffs is a good illustration of the absurdity of that whole line of argument. The document goes through the administration's two years of waffling between declaring "that aluminum articles were being imported into the United States in such quantities and under such circumstances as to threaten to impair the national security of the United States," and subsequently deciding that "imports of aluminum from Canada would no longer threaten to impair the national security," before reversing course again just months later and then once more on Tuesday.

Strip away the fancy letterhead and self-serious rhetoric, and you're left with a rather silly proposition. As Sen. Chuck Grassley (R–Iowa) wrote on Twitter shortly after the administration announced the new tariff plans: "Use of national defense tariffs is ridiculous, beer cans are not defense weapons."

But perhaps nothing reveals the ridiculousness of the Trump administration's claim that aluminum imports are a national security issue like what the Trump administration did on Tuesday. If this were a matter of national security, suddenly changing the decision to levy tariffs would be imprudent.

The entire charade of treating routine, peaceful transactions between people on different sides of a border as somehow undermining national security has always been farcical—at least if you live in a world where the words "national security" have meaning. It would be funnier, of course, if there weren't thousands of jobs hanging in the balance, subject to the whims of a president and his trade advisers who seem to have learned little from two-plus years of trade wars that stubbornly refuse to be either good or easy to win.

Still, give the White House some credit for recognizing this folly before it went any further.

"Removing these disruptive and unnecessary tariffs on Canadian aluminum was the right decision for the U.S. aluminum industry and its 162,000 workers," Tom Dobbins, president and CEO of the Aluminum Association, an industry group, said in a statement. "Especially as the industry continues to recover from the worst of the COVID-driven demand disruptions, it is vital that we keep North American aluminum supply chains open and unencumbered."

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  2. It’s almost as if Trump lacks the omniscience necessary to micromanage the US economy and we might be better off letting people manage their own affairs. It’s like we can assume that people might be more knowledgeable about what directly affects them than things that don’t affect them.

    1. At least he knows when to hold ’em and when to fold ’em. Most politicians dig in and deny any mistake, or harmful consequence, even happened.

      1. No thanks Obama did this too and before him GW Bush. So neither Dem nor Repub gets my vote.

        Read my lips, NO NEW TAXES!

  3. Complain about the tariffs, then complain when they aren’t imposed.

    If they’d said nothing, would we also hear a complaint about that? Want to complain about the timing of the announcements? The tone? The grammar used? The letterhead used for the memo?

    Orange Man Bad continues to beclown Reason writers.

    1. “then complain when they aren’t imposed.”

      When has Reason ever complained about the lack of tariffs?

      1. He didn’t say lack of tariffs. He said “when they aren’t imposed”. The idea was dropped. So how the hell is this a subject for criticism? I guess because he thought of it and didn’t do it. If that’s the new standard for how we are criticized, we are all fucked. Inversely, can we all start taking credit for things we thought of and didn’t do as well?

        To have wasted an entire article bitching about things we don’t like that didn’t happen is the ultimate in TDS, even surpassing bitching that the president had a bigger salt shaker and two scoops of ice cream.

        That said, apparently there’s not an entire person here so far who understands that proposed action [maybe this one maybe not] are tactics and leverage used in everyday interaction from parenting to employment to sales contracts to criminal law to international diplomacy. It’s how we get the other guy motivated to move on something we want. But I suppose, why depend on inside information and understanding when one’s ignorance and political bias can shed more light.

      2. “when they aren’t imposed”.

  4. “Use of national defense tariffs is ridiculous, beer cans are not defense weapons.”

    Agreed. They’re better as offensive weapons.

  5. It’s long past time to take away the tariff power from the President. Tariffs are taxes and it’s up to Congress to impose them, not the whim of a president.

    Trade agreements are one thing, that’s treaties and the President with the approval of the Senate can enter into treaties. But getting miffed and imposing new tariffs because feelz were hurt is the job of Congress.

    1. You obviously have no idea what a trade deal is. I don’t like tariffs in many instances, but they are actually a tool in the formation of trade agreements on both sides. They are used to threaten to reduce the market for the other guy’s products by forcing his prices up till he adequately moves your direction, and the only other way to do that is to impose limiting numbers of imports, which also has serious implications with trade.

      I don’t have enough information to know if there was any intention to do that here or what quid pro quo changes might have been made in other areas to eliminate this tariff threat, but neither do you, and it’s not his job to keep us abreast of negotiation tactics. Nevertheless, removing that capability to use it as part of a trade deal is actually leveraging the other side to have all the cards.

      1. Quid pro quo!? Impeach!!!

      2. So happy to have a government finally in charge of trade, industry and commerce. Not their job to “keep us abreast” of tactics.

  6. Aluminum imploding!

  7. So Boehm rights an article bitching about a tariffs proposal that never ended up happening.

    Meanwhile:
    – A peace deal between Israel and the UAE has been signed.
    – A peace deal between Israel and Bahrain has been made.
    – A peace deal between Serbia and Kosovo has been made.
    – A peace deal between the USA and the Taliban has been made.
    – A peace deal between the combatants in Yemen is being negotiated.
    – A North American trade agreement miles better than NAFTA was just signed.
    – China intensifies its Uighur holocaust. The biggest genocide since Pol Pot.
    – Trump decides it’s time for the US to stop occupying Germany after 75 years.
    – It’s looking more and more like the last president is responsible for an illegal spy scandal that makes Watergate look like jaywalking.
    – A US president was just nominated twice for a peace prize.

    World changing shit happening just this month, but the Reasonistas do nothing but prattle about tariffs that never happened, hypothetical wars with Iran, pedo movie defenses and fake scandals like Jeff Goldberg’s fraud.

    1. And now we have a peace deal with Canada.

      That was a close one.

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