Trump has Canadian and Chinese aluminum confused

A year ago, the Trump administration started imposing tariffs on steel and aluminum imports under the pretext of “national security.” Listening to the administration’s arguments, one would have thought that it was about protecting American industries against Chinese overcapacity and dumping. Well, think again.

China is mostly exempted from those tariffs while Canada is hit the hardest. That’s right: George Mason University’s Mercatus Center found that importers of Chinese aluminum obtained waivers on 86 percent of their imports, while importers of Canadian aluminum obtained waivers on a meager 0.2 percent of their imports. Apparently, China is not a threat to U.S. national security, but Canada is.

{mosads}That’s not how it was supposed to be. Last year, when I wrote the U.S. ambassador in Ottawa to express our concerns, she replied by praising our “unique security partnership” and complaining about “Chinese overproduction.”

I was convinced that common sense would prevail. Alas, three months later, our aluminum was deemed a security threat and tariffs were imposed on us for no apparent reason.

Let’s be clear: Quebec, where 90 percent of Canada’s aluminum is produced, is not a security threat to the United States. In fact, it’s quite the opposite. When it comes to aluminum, the United States has never been self-sufficient and has always relied on us to supply their military and industrial needs.

The first major aluminum smelter in North America, owned and operated by what is now Alcoa, was not in the United States. It opened in 1901 in Shawinigan, Quebec.

For more than a century, our vast hydroelectric resources have allowed us to supply the U.S. with the aluminum it needed in times of war as well as in times of peace.

Yes, our hydroelectric resources allow us to produce lots of aluminum at a reasonable price with very low carbon emissions. Yes, we’re gifted by geography with our 3.5 million lakes and rivers on a land mass roughly one-third the size of the mainland U.S. But far from being a threat, we present an opportunity for the United States.

In 1955, Dwight Eisenhower asked Congress for the authority to raise tariffs on foreign oil to make sure that domestic oil production could meet the United States’ military needs. This is the origin of Section 232 of the Trade Expansion Act of 1962.

Lesser known is the fact that at the same time, he was pursuing a complete integration of the United States’ and Canadian military-industrial bases, which he obtained with the Defense Development Sharing Agreement of 1956.

By doing so, he wanted to increase the U.S. defense industry capacity and secure predictable tariff-free access to Canadian resources and raw metals, notably aluminum, which the U.S. could not produce sufficiently on its own.

That mutually beneficial relationship continued and expanded to modern times. Last year, when Donald Trump’s own Commerce Department conducted its investigation on aluminum under Section 232, not only did it deem us a “reliable supplier” but it considered Quebec’s aluminum production as part of “domestic production,” thanks to Eisenhower’s decisions in 1956.

We insist that the administration returns to considering our aluminum essential to U.S. national defense and that disrupting the free flow of aluminum on the continent would threaten U.S. national security.

Because the administration’s actions blatantly contradict its own findings, the tariffs imposed on aluminum from Quebec and Canada appear to rest on very shaky legal grounds.

Deeming Quebec and Canada as threats to U.S. national security is both outrageous and completely baseless. Our aluminum cannot be held responsible for the difficulties of the U.S. industry: Our market share hasn’t increased in 25 years.

There is no economic rationale to it either. Every job created in U.S. aluminum smelters last year cost more than $5 million to the manufacturing sector.

On March 28, the International Monetary Fund reported that removing steel and aluminum tariffs — and the Canadian and Mexican countermeasures that come with them — would greatly enhance the welfare benefits of the U.S.-Mexico-Canada Agreement (USMCA) to the American economy. 

{mossecondads}There seems to be no reason for these tariffs to remain in place — other than the pleasure of poking Canadians in their eyes. That’s not how friends and allies behave toward one another.

Aluminum smelters procure 10 000 well-paid jobs in Quebec. Those workers are our constituents. They wouldn’t understand how we could ratify treaties with countries that don’t respect their own word and signature. Therefore, we will oppose USMCA until tariffs on aluminum are permanently lifted.

While visiting Ottawa in 1961, John F. Kennedy said: “Geography has made us neighbors. History has made us friends. Economics has made us partners, and necessity has made us allies. Those whom God has so joined together, let no man put asunder.”

Our message to lawmakers is simple: Canada and Quebec are not China. Please lift those tariffs and make our friendship, partnership and alliance thrive again.

Gabriel Ste-Marie is a Bloc Québécois member of Canadian Parliament representing the Joliette electoral district in Quebec, Canada.