R Street Institute’s Halie Craig: “New Canadian aluminum tariffs threaten to harm trade benefits”
One of the latest threats facing the auto industry is the decision last month to reinstate Section 232 national security tariffs on certain aluminum products from Canada – just weeks after the U.S.-Mexico-Canada Agreement entered into force – which has prompted plans for countermeasures and the possibility of further escalation.
The alarming series of events has led a number of industry stakeholders to speak out. We said at the time:
“Given the threat of tariffs hanging over the auto industry, Driving American Jobs is troubled by the Trump Administration’s decision to reimpose aluminum tariffs against Canada – a close trading partner and military ally. While we support leveling the playing field, the auto industry strongly believes any Administration should only use Section 232 authorities for true national security threats. The Driving American Jobs Coalition stands with the Members of Congress who agree national security tariffs should not be used in trade disputes between allies.”
Last week, Halie Craig, an associate fellow for international trade and investment policy at the R Street Institute think tank, authored an opinion piece in The Hill weighing in on the developments.
Craig makes 3 key points:
- The tariffs were backed by a lobbying campaign that “represents just two aluminum makers” and is opposed by the broader aluminum industry: “The White House, counting on misleading math, claimed a surge in imports of primary aluminum by comparing these volumes from the period in which the national security tariffs were in place to the period after. The leading aluminum industry group noted that this lobbying campaign represents just two aluminum makers in the United States. A public letter signed by over a dozen American aluminum company executives stated, ‘it is hard to think of a less opportune time to impose a barrier to rational and fair aluminum trade’ within the market on the continent.”
- The tariffs are “more likely to endanger jobs than create them”: “In addition to very little impact on primary aluminum production capacity, the tariffs are also more likely to endanger jobs than create them. Several observers point out that far more workers are employed in the midstream to downstream aluminum industry than employed with direct production. Increasing the cost for raw materials makes employing these workers, an estimated 97 percent of aluminum workers, more expensive.”
- The “reckless tariff actions of the White House once more raises concerns” – and calls into question the role of Congress: “The latest provocation of tariffs demonstrates that this is not the case. The deal has not ensured smoother trade relations with partners, and an unwillingness of our lawmakers to intervene continues to empower such dire economic entropy. The reckless tariff actions of the White House once more raises concerns. Will Congress rein in tariff abuse?”
ICYMI: Craig last questioned “Will Congress Rein in Tariff Abuse?” in a July 2 National Review column that was co-authored with Clark Packard, resident fellow and trade policy counsel at the R Street Institute. The piece responded to a Supreme Court decision not to take up a case challenging the constitutionality of Section 232 tariffs on steel: “Unless Congress wants to see new pressures on the economy from destructive tariff policies and even more job uncertainty for Americans in the middle of a pandemic, it needs to reassert its authority over trade.”
