Background

Just weeks after reimposing an additional 10 percent tariff on non-alloyed unwrought aluminum articles from Canada, the Trump administration has announced that it will resume duty-free treatment of such goods, retroactive to Sept. 1, 2020. The changes comes after Canada threatened to retaliate against $2.7 billion worth of imports from the U.S. beginning Sept. 15.

The U.S. imposed a section 232 tariff on aluminum products from Canada in June 2018, following which Ottawa levied retaliatory tariffs on goods from the U.S. Both sides lifted their tariffs in May 2019 after they agreed on a range of measures expected to allow imports of aluminum from Canada to remain stable at historical levels without meaningful increases.

In August the Office of the U.S. Trade Representative said it would reimpose the tariff after the Department of Commerce reported an 87 percent surge in imports over the previous 12 months. However, USTR now finds that trade in these goods “is likely to normalize in the last four months of 2020,” with average monthly imports expected to decline 50 percent from the first half of the year.

USTR states that six weeks after the end of any month during this period it will determine whether actual shipments met expectations of not exceeding specified amounts (83,000 tons in September and November and 70,000 tons in October and December). If shipments exceed 105 percent of the expected volume for any of these months the U.S. (1) will impose the 10 percent tariff retroactively on all shipments made in that month and (2) may reimpose the tariff going forward.

However, an Associated Press report quotes an unnamed senior Canadian official as saying “Canada has agreed to none of that.”

For more information, please contact Kristen Smith or Nicole Bivens Collinson.

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