U.S. President Donald Trump said Aug. 6 that his country would reimpose a 10 percent tariff on some aluminum products imported from Canada. The tariff, which affects non-alloyed unwrought aluminum articles, took effect yesterday.
Actually, to facilitate the U.S.-Mexico-Canada Free Trade Agreement (USMCA) in May 2019, the Trump administration suspended the 10 percent tariff on aluminum products from Canada and Mexico more than a year ago. However, with the enforcement of the regional free trade agreement just July 1 this year, the U.S. Government was eager to instigate a new round of trade disputes and upset one of its most important allies and trading partners in North America.
Interestingly, national security has turned out to be a cliché in the United States. Similar to its recent accusations against some Chinese high-tech companies such as Huawei, ByteDance and Tencent under the pretext of national security, Washington this time also claimed that Canadian aluminum industry posed a threat to U.S. national security.
Aluminum is surely of great significance in modern industry. From 1880 to 1980, the U.S. production of aluminum held the global leading position for almost a century. However, its production has been declining drastically since then. According to statistics, U.S. output of aluminum was only 0.74 million tons in 2017, lower than the figures in some small countries such as Iceland and Bahrain.
Canada is now the largest source of U.S. imports of non-alloyed unwrought aluminum, accounting for almost two-thirds of total U.S. imports. It was reported that U.S. imports of such products from Canada from June 2019 to May 2020 had increased by 87 percent. But such a Canadian industrial advantage is based on fair competition and free labor division, and is not based on looting and manipulation.
Frankly speaking, from President Trump's perspective, his re-election campaign is much more important than American allies. In the 2016 election, he received strong and even decisive support from his country's Rust Belt states including Ohio, Iowa, Michigan and Minnesota. These states, relying mainly on iron, steel, aluminum and other heavy industries, once shined in the world but later turned lackluster due to their slow and sluggish industrial upgrading and economic transformation processes.
To win this year's re-election, Trump needs their support even more than before, so he wants to send the Rust Belt states a gift bag with the sacrifice of its ally neighbor Canada. It was reported that two U.S. companies, namely Century Aluminum Co. and Magnitude 7 Metals, have lobbied Trump to reimpose tariffs against Canada. Nevertheless, his decision is opposed by many other U.S. aluminum producers as a tariff hike is double-edged and will also raise the costs for American manufacturers. Moreover, it will also draw retaliation targeting U.S. exports. In response to the American tariff hike, the Canadian Government has announced more tariffs on US$2.7 billion worth of U.S. products for retaliation. "Canadian aluminum strengthens U.S. national security and has done so for decades through unparalleled cooperation between the two countries. At a time when we are fighting a global pandemic, a trade dispute is the last thing anyone needs," Canadian Deputy Prime Minister Chrystia Freeland said.
Attaining a win-win situation is an idea deeply rooted in Chinese philosophy. However, it seems that Trump always wants to win by himself and always wants to win everything. Being good at cutting international supply chains in recent years, he is also afraid of the U.S. supply chains being cut by any other country, no matter if such supply chains are controlled by a competitor or an allied nation.
Facts speak louder than eloquence. The Trump administration has shown the world how an incapable government can transform a great and democratic country into a chaotic and divided one in a short period of time. In recent days, serious violence, looting and rioting have taken place in U.S. cities such as New York, Chicago, Portland and Seattle. For Canada and other U.S. allies, they should also clearly bear in mind that no matter what they have done or what they will do at the behest of Washington, nothing will secure them a preferential treatment from the superpower.
(The author is the editor-in-chief of Shenzhen Daily with a Ph.D. from the Journalism and Communication School of Wuhan University.)