Earlier this month, the Commerce Department declared the steel and aluminum imports a national security threat, and President Donald Trump must decide by mid-April whether to impose sanctions, including quotas and tariffs.
But all of the options presented by the Commerce Department would affect Canada, a longtime supplier of metals to the U.S. military and industry. Imports from Britain, Australia, South Korea and other countries could also be hit.
Trump could choose to accept one of the Commerce Department’s recommendations or fashion his own remedy. Either way, the issue highlights the difficulty the Trump administration faces as it seeks to limit imports in a world where companies routinely make, ship and sell products across borders.
The potential trade action is further straining already-tense relations between the United States and Canada, two of the world’s most integrated economies. The countries have clashed over the North American Free Trade Agreement, U.S. tariffs on Canadian lumber and Canada’s recent complaint to the World Trade Organization about U.S. trade practices.
Last Thursday, James Mattis, the defense secretary, published a public letter concluding that the decline of the U.S. industry as a result of unfair trade posed a threat to national security, a position aligned with the Commerce Department’s. But he urged the administration to proceed cautiously, particularly with regard to allies.
Yet the United States could face a challenge in crafting trade sanctions that circumvent allies and target China.
Canada accounted for more than half of U.S. imports of aluminum in 2016, followed distantly by Russia and the United Arab Emirates. Canada also made up the largest share of U.S. steel imports in 2016, followed by Brazil, South Korea, Mexico and Turkey. China did not rank among the top 10 suppliers of either metal.
“From a defense perspective, it makes no sense to limit imports from Canada in the future,” said Alf Barrios, the chief executive of Rio Tinto Aluminum, which exports aluminum from Canada to the United States.
This article originally appeared in The New York Times.
ANA SWANSON © 2018 The New York Times