How Steel & Aluminum Tariffs Changed Canada-U.S. Relations Forever

For years, Canada and the United States have been close trading partners. But in 2018, their relationship faced a major challenge when the U.S. imposed tariffs on Canadian steel and aluminum. This led to a back-and-forth trade dispute that lasted for years. Here’s a detailed timeline of how the events unfolded.

March 2018: The U.S. Announces Tariffs

In March 2018, then-U.S. President Donald Trump announced that his administration would impose tariffs of 25% on steel and 10% on aluminum imports. The move was justified under Section 232 of the Trade Expansion Act, which allows tariffs for national security reasons. This decision affected several countries, including Canada, Mexico, and the European Union.

May 2018: Temporary Exemption for Canada Ends

At first, Canada was given a temporary exemption from the tariffs. However, in May 2018, the exemption expired, and the U.S. officially imposed the duties on Canadian steel and aluminum. Canada, one of the largest suppliers of these metals to the U.S., was hit hard by the move. The decision sparked outrage among Canadian officials and businesses.

June 2018: Canada Retaliates with Counter-Tariffs

In response, Canada announced retaliatory tariffs on U.S. goods worth $16.6 billion CAD. The tariffs targeted products such as steel, aluminum, ketchup, whiskey, and even lawnmowers. Prime Minister Justin Trudeau called the U.S. tariffs “unacceptable” and emphasized that Canada would defend its workers and industries.

November 2018: Canada and U.S. Begin Talks to End Tariffs

As tensions grew, both countries started negotiations to resolve the dispute. Businesses on both sides of the border were struggling with higher costs, and pressure mounted on leaders to find a solution.

May 2019: Tariffs Are Lifted

After months of discussions, Canada and the U.S. reached an agreement to remove the tariffs. In May 2019, both countries officially lifted the steel and aluminum tariffs. The agreement also required Canada to prevent any surge in steel and aluminum exports to the U.S.

August 2020: Trump Reinstates Tariffs on Canadian Aluminum

In an unexpected move, Trump announced the reintroduction of 10% tariffs on Canadian aluminum in August 2020. He argued that Canada was flooding the U.S. market with aluminum, hurting American producers. The decision came just a month after the new USMCA (United States-Mexico-Canada Agreement) trade deal went into effect.

September 2020: U.S. Cancels Tariffs Again

Canada planned to retaliate with new counter-tariffs, but before they could take effect, the U.S. decided to drop the aluminum tariffs in September 2020. The Trump administration stated that aluminum imports from Canada had decreased, making the tariffs unnecessary.

2021-Present: Ongoing Trade Tensions

Since Joe Biden took office as U.S. President in 2021, there have been fewer tariff-related conflicts between Canada and the U.S. However, trade tensions remain, especially regarding the protection of domestic industries. Canadian officials continue to push for fair trade policies and protection from future tariffs.

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Conclusion: A Complex Trade Relationship

The steel and aluminum tariff dispute between Canada and the U.S. highlighted the challenges of international trade, even between close allies. While the tariffs have been removed, the possibility of future trade conflicts remains. Businesses and governments on both sides of the border are now more cautious about how such disputes can affect the economy.

As both countries move forward, they must work together to ensure a stable and fair trading environment for their industries and workers.