The United States is pulling back a 10% tariff it placed on Canadian aluminum exports in mid-August that drew the ire of many, including the governors of Vermont, New Hampshire and Maine.
According to the Office of the United States Trade Representative, the return to tariff-free non-alloyed, unwrought aluminum from Canada will be retroactive to Sept. 1. USTR claimed this decision was made after consulting with the Canadian government. According to USTR, aluminum exports from Canada are expected to “normalize” from now until the end of the year.
The tariff could come back, however, according to USTR, and could be applied retroactively depending on how much aluminum is traded.
“Six weeks after the end of any month during this period, the United States will determine whether actual shipments met expectations,” USTR stated Tuesday. “If actual shipments exceeded 105% of the expected volume for any month during the four-month period, then the United States will impose the 10% tariff retroactively on all shipments made in that month.”
Gov. Phil Scott said Tuesday he appreciates the move.
“Trade with Canada is critical for Vermont’s and our neighboring border states’ economies, which is why Governor Mills, Governor Sununu and I advocated for this policy change — as did Congressman Peter Welch,” Scott stated in an email. “Reversing these tariffs is beneficial for many Vermont businesses, and I appreciate the White House taking this important step.”
The Vermont Chamber of Commerce, which was critical of the tariffs as far back as 2018 when it also came with a 25% tariff on Canadian steel, was also pleased with the development.
“Tariffs create uncertainty, raise costs, lower sales revenues and place our manufacturers at a competitive disadvantage,” said Chris Carrigan, vice president of the Vermont Chamber, on Tuesday. “Lifting the tariff will aid in the recovery of our manufacturers in the aerospace, industrial and medical industries, as well as strengthen our strong-border cooperation, collaboration, trade and integrated supply chains for a mutually beneficial economic relationship.”
The governors of Vermont, New Hampshire and Maine wrote a joint letter to the Trump Administration on Sept. 8 asking President Trump to rescind the tariff on aluminum.
“These tariffs are unnecessary and inappropriate to which there will be negative consequences, one of which is the artificial inflation of costs to aluminum goods to consumers and suppliers,” the governors stated. “New England depends on bi-lateral trade with Canada.”
Carrigan, shortly before the USTR announcement, said the 10% aluminum tariff was especially concerning, as Vermont had spent the better part of a decade working on an aerospace trade corridor through Quebec, Vermont, and Connecticut. He said Quebec’s $13.8 billion aerospace cluster was a nice thing for Vermont’s $2 billion aerospace manufacturing and civil aviation industry to be tied to, along with Connecticut’s which is also significant.
The Vermont Chamber surveyed Vermont and New Hampshire aerospace, industrial and medical manufacturers and learned 30% of respondents were negatively impacted by the 2018 tariffs. A second survey about the reimposed aluminum tariff showed half expected to be impacted.
Carrigan said the tariff was expected to drive up costs as manufacturers passed the cost on, or sought other sources of aluminum from overseas. A big concern was what, if any, retaliatory measures might have been taken by Canada in response to the aluminum duty.