President Donald Trump has moved to reimpose a 10 percent tariff on some Canadian aluminium products to protect US industry from a “surge” in imports, angering Ottawa and some US business groups.

Canada and the US reached a deal last year to lift tariffs on steel and aluminium imports that had been imposed on grounds of “national security”.

The US had imposed a 25 percent tax on steel and 10 percent on aluminium on Canada in 2018.

Prime Minister Justin Trudeau recently said he believes a new levy would have “no justification”.

Speaking in Ohio today, Trump said the tariffs were necessary to defend the US aluminium industry because Canadian producers had broken their commitment to stop flooding the US market with a cheaper product.

The step was “absolutely necessary to defend our aluminium industry”, he said.

As part of a 2019 agreement lifting the measures, the US and Canada said they would monitor imports and, if a country is determined to be buying in too much, one of the other nations could request a consultation and potentially reimpose tariffs.

A 10 percent tariff on imports of “non-alloyed unwrought aluminium from Canada” was imposed today.

OHIO, USA - AUGUST 06 : U.S. President Donald Trump delivers remarks at Whirlpool Corporation Manufacturing Plant in Clyde, Ohio, United States on August 06, 2020.

US President Donald Trump announces the new tariffs at a factory in Clyde, Ohio. Photo: AFP

Surge of imports blamed

In a statement on Trump’s presidential proclamation, the office of the United States trade representative said that “imports from Canada of the product that accounts for the largest share of Canada’s aluminium exports to the United States have surged above historical levels”.

The surge has only intensified in recent months, despite a drop in US demand, according to the statement.

Canada was exempted from the tariffs in 2019 “on the basis of an agreement that imports of steel and aluminium products from Canada would remain at historical levels”.

Some US aluminium bosses oppose move

The US Chamber of Commerce is warning that a decision to bring back the tariffs could raise costs for US manufacturers.

Myron Brilliant, head of international affairs for the industry group, told Reuters the move was “a step in the wrong direction” and that the measures are opposed by US aluminium manufacturers.

In late June, a group of 15 aluminium executives sent a letter to US trade representative Robert Lighthizer calling for continued tariff exemptions for aluminium in North America.

They said they had government data discounting a “surge”, and argued that current import levels are largely consistent with historical trends.

Canada’s deputy Prime Minister Chrystia Freeland called the measures “unwarranted and unacceptable” and denied Canadian aluminium undermined US national security.

She said in a statement that Canada “will always stand up for our aluminium workers” and the country plans to “swiftly impose dollar-for-dollar countermeasures”.

Canada’s Chamber of Commerce said the “tariffs were the wrong instrument when they were first imposed in 2018, and they remain the wrong instrument now”.

National Foreign Trade Council, a US-based pro-trade group, called imposing the new measures a “misguided action”, warning it could undermine the new free trade agreement between the US, Canada and Mexico, which came into force in July.

But Michael Bless, chief executive of Century Aluminium, said the move “helps to secure continued domestic production of this vital strategic material and level the playing field for thousands of American aluminium workers”, according to Reuters.

– BBC