Pledged tariff exemptions for a move to the U.S.

Canadian companies in the aluminum and steel sector now just need to commit to investing in the United States to obtain an exemption from the customs duties imposed by the Trump administration.

The United States had already announced their intention to directly grant tariff relief to Canadian and Mexican companies in these sectors, but a notice published on Thursday in the Federal Register officially paves the way for this measure.

This publication detailed a new official procedure allowing Canadian companies to provide evidence and benefit from lower costs for their shipments to the United States starting now, on the condition of later investing in relocating their production south of the border.

On Thursday, in the Oval Office, Donald Trump generally discussed his trade strategy, which has been used to put similar pressure on automakers to move their production south of the border. “Canadian automakers are coming,” the president said. “They are also coming from Mexico, Germany, and Japan.”

Intense week of negotiations

This announcement comes at the end of a tense week marked by public exchanges between American and Canadian officials.

“It is a very aggressive tactic by the United States,” said William Pellerin, a lawyer specializing in international commercial law. “This only reinforces the approach we have been seeing from the United States for some time now, which simply boils down to this: we win if you lose.”

The Trump administration has been imposing tariffs on the Canadian aluminum and steel sectors for over a year, reaching 50%.

Earlier in April, the United States also changed the way they apply tariffs on manufactured products, severely impacting Canadian companies.

“Many of our clients are laying off employees and shutting down factories,” said Mr. Pellerin, whose firm represents companies dealing with American tariffs. “It is really painful to see these massive layoffs happening in Canada.”

Canada has not been successful in resuming official negotiations with the United States regarding the reduction of sectoral tariffs since the talks broke down last autumn.

On Thursday, Prime Minister Mark Carney called the sectoral tariffs imposed by the Trump administration a violation of the Canada-United States-Mexico Agreement, which will undergo a review in July. He stated that Canada is ready to begin more in-depth negotiations, or wait if necessary.

Murky calculations

Jean Simard, leader of the Aluminum Association of Canada and new member of the Advisory Committee on Economic Relations between Canada and the United States, said that the American proposal is not economically viable.

“It doesn’t make sense, as we are talking about investments of several billion dollars, and we do not know what the price of metal will be in the coming years. It’s a bit fuzzy as a calculation,” he said.

Catherine Cobden, President and CEO of the Canadian Steel Producers Association, argues that it is difficult to determine to what extent the United States will benefit from its industry.

She added that there is currently a lot of uncertainty, and Canadian steel companies have already invested a lot in Canadian production.

“A steel mill represents a colossal investment,” explained Ms. Cobden. “You can find up to $1 billion or more in assets in a steel mill. A steel mill is a considerable asset that cannot simply be closed and abandoned, and its doors cannot be locked and lights turned off.”

According to a text by Ashley Burke of CBC News.