Tariffs still a sore spotClick image to enlarge

Two months following the signing of the “new NAFTA” – better known as USMCA – U.S. tariffs on Canadian steel and aluminum remain a sore spot between the two countries.

Pegged at 25 per cent for steel and 10 per cent on aluminum, the tariffs were imposed on grounds of U.S. national security. But Canadian Prime Minister Justin Trudeau, as he signed the USMCA agreement for Canada at the end of November, reminded U.S. President Trump that the tariffs remained in place and that Canada would continue to work to have them removed.

As recently as last week, Trump remained firmly behind the tariffs, calling them a “big win” for his country in preventing steel dumping.

As BMM Bloomberg reports, not everyone agrees. Aside from the continuing Canadian objections, even U.S. steel and aluminum makers have found that the brief boost the tariffs gave them haven’t lasted – a common problem with any government imposed tariffs, according to one U.S. industry analyst.

Christopher Plummer, president and managing director of Pennsylvania-based consulting firm Metals Strategies Inc., noted that the average price for hot-rolled steel sheet, a bellwether for the industry, rose from an average of US$687 a ton in January of last year to around US$833 a ton in March when the tariffs were imposed. After reaching an average of US$912 a ton in July, the price has fallen steadily, hitting US$663 a ton at the end of last week.

At the same time producers in Canada have started to perform better under the tariffs, thanks in part to improved cost efficiencies, Plummer said. Nonetheless price increases could be on the way for Canadian consumers, for good such as appliances and soft drinks, among others.

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