On Monday, President Donald Trump announced that 25% tariffs on steel and aluminum imports will begin being implemented on March 4.
With these tariffs cracking down on previous exemptions that were established, Canadian exports to the United States may take the hardest hit.
This is not the first time President Trump implemented tariffs on steel and aluminum coming into the U.S.
He did the same in 2018, citing national security concerns, but this time, the tax is higher.
“In case there are conflicts, countries want to make sure they have guaranteed access to their own levels of production,” said Ben Niu, associate professor of economics and data analytics at St. John Fisher University. “Now when he implemented them against Canada and Mexico, it was a little odd because we’re not exactly adversarial.”
The USMCA, a trade agreement between the United States, Canada and Mexico, carved out exemptions for Canada and Mexico in 2019.
Now, Canada and Mexico are among 10 countries or territories President Trump’s executive order says will no longer be excluded from import taxes.
“That’s what we know for now and I’m sure stuff is probably going to change,” said Niu.
Industry experts say while the tariffs are meant to increase national security and help will gross domestic production, they will impact people on both sides of the border.
“The 2018 tariffs were great for American steel,” Niu said. “They got, I think it was an extra $2 billion in revenue and production, but it ended up costing, for all the related downstream industries, everyone that uses steel, they had to pay higher import prices; domestic prices are higher.”
When the 2018 Trump administration implemented steel and aluminum tariffs, Canada hit back.
“So does that mean if Canada puts retaliatory tariffs U.S. coming into Canada, the same product’s going to face tariffs on both sides of the border, so it’s just going to increase the cost, which consumers will stop buying. Which is probably going to slow down the whole economy,” said Ron Wells, president of United Steelworkers Union Local 1005 in Hamilton, Ontario.
Canada’s retaliatory tariffs in 2018 impacted more than $16 billion in U.S. exports to Canada, including things like steel, aluminum and back then even products like orange juice and ketchup.
It’s something that could once again become a reality.
“Last time it cost the economy about $6 billion in additional spending,” said Niu. “It’s massively damaging to the economy for everyday consumers.”
