(Rio Tinto/Contributed)

(Rio Tinto/Contributed)

U.S. proposed steel, aluminum tariffs leave uncertainty for B.C. site

Rio Tinto has been operating in British Columbia for over 60 years, but tariffs cause fear

President Donald Trump has lobbed a grenade of uncertainty onto the NAFTA negotiating table, suggesting Monday that tariffs on Canadian and Mexican steel are now dependent on whether the countries agree to a new trade pact.

The threat unfolded in tandem with a related development in Mexico City. At the end of the latest round of NAFTA talks, the U.S. trade czar indicated his desire to drive toward a quick deal — and not only complete an agreement within months, but then also hold public consultations before a final ratification vote by year’s end in the U.S. Congress.

That raises the prospect of a pressure-cooker of a negotiation over the coming months, with the twin ingredients of a tariff fight and trade talks being potentially blended together into one sizzling political stew.

“We’re not backing down… Right now, 100 per cent (chance we proceed with tariffs),” Trump said Monday in the Oval Office.

”But it could be a part of NAFTA.”

In B.C., it’s unsure at this point how the proposed U.S. government’s 10 per cent tariff on aluminium imported into the U.S. would impact Rio Tinto’s BC Works in Kitimat.

What is certain, however, is that Canadian aluminium producers were taken by surprise by U.S. president Donald Trump’s premature announcement.

“At this stage we cannot measure the impact of the tariff. We don’t have exact details – it’s too soon,” said Rio Tinto Canada’s manager of media relations, Claudine Gagnon.

“We knew that there were discussions around Section 232 and trade. We knew a decision would come.”

The Trump administration launched a Section 232 investigation last year into the impact of imported steel and aluminium on the U.S.’ national security. Section 232 of the U.S. Trade Expansion Act of 1962 gives the president the power to impose restrictions on imports to protect national security.

READ MORE: Trump tweets that steel, aluminum tariffs stay unless there’s a new NAFTA deal

READ MORE: Trump promises big tariffs on steel, aluminum; impact on Canada still unclear

“We don’t have all the details but we are going to continue to engage with U.S. officials and show them the benefits of the integrated North American aluminium supply chain,” said Gagnon.

She said representatives from Rio Tinto Canada and the Canadian Aluminium Association are also in talks with senior Canadian government and union representatives.

Gagnon said the proposed tariff is of great concern, especially for Kitimat’s BC Works, which exports 50 per cent of its production to the U.S.

She said 70 per cent of aluminium produced in Canada is shipped to the U.S., with sales in more than 35 U.S. states, supplying a third of the aluminium to the North American market.

Last year Rio Tinto and the other aluminium producers in Canada exported a combined 2,759,000 metric tons of aluminium, valued at over U.S. $5.6 billion, to the U.S.

“We are the leading primary metal supplier for those products that are used to manufacture for example the Ford F150,” said Gagnon. “It’s very important for employees and supplier chains.”

President and CEO of the Aluminium Association of Canada, Jean Simard, said the problem wasn’t the export of Canadian aluminium to the U.S., rather the export of aluminium from China.

“If the U.S. hits its strategic allies such as Canada with measures, they are missing the appropriate target and they expose their economy to serious adverse effects that are greater than the expected gains,” said Simard.

“The problem of Chinese overcapacity is one we all face. Canada has always been part of the solution and should be treated as such,” added Simard.

He said the blanket imposition of the tariff on the U.S.’ historic allies, Canada and Europe, “is a real invitation to a significant commercial trade conflict that will serve no one”.

“We can expect retaliatory measures elsewhere in the world that will destabilize market equilibrium. Unfortunately, the real problem, Chinese overcapacity, will remain unresolved,” he added.

Simard was in Kitimat in June last year to present a state of the aluminium industry report to Kitimat Chamber of Commerce members. During his presentation, he said it was essential that Canada stop relying on the U.S. to take the majority of its aluminium and develop a new market in Europe.

“With Trump in power, the aluminium industry is also up in the air,” were Simard’s prophetic words at the time.

“Europe is the new China – we have to think out the box now. This is part of the change that is ahead of us. Our stability is going to be ensured through change. It’s time we build a new agreement with Europe.”

Last week Kitimat Unifor Local 2301 president Sean O’Driscoll said Unifor representatives would be meeting with the provincial energy and trade ministers in Victoria to lobby on behalf of BC Works members and the community.

“We are disappointed, to say the least, that the Trump administration would impose a potentially debilitating tariff on aluminium imports from the Kitimat smelter,” said O’Driscoll.

“Rio Tinto has recently been growing its market for Kitimat aluminium in the U.S., and given that, ironically, our countries are currently attempting to renegotiate a new fair trade agreement under NAFTA, this move by the U.S. is troubling to our members.”

Unifor Quebec director Renaud Gagné said it was clear that the U.S. was using the tariffs as a trade weapon.

“It’s no accident that these duties were announced while NAFTA talks are underway. The federal government must stand and fight, here and now, against this threat by the U.S. government and supporting stakeholders,” said Gagné.

Unifor national president Jerry Dias said Trump has made it clear that Canada’s steel and aluminium industries are being held hostage to extort a NAFTA deal.

“Trump plainly stated that tariffs will only come off if Canada signs a NAFTA agreement to his liking,” said Dias. “The question now is whether the Canadian government is going to submit to trade blackmail.”

He said if the tariffs on steel and aluminium exports to U.S. are implemented, the Canadian government would have no choice but to withdraw from North American Fair Trade Agreement renegotiations.

“If America imposes duties on steel and aluminium and Canada doesn’t walk away from NAFTA immediately then make no mistake we will no longer be negotiating, we’ll be capitulating,” said Dias.

He said the tariffs would also hurt the U.S. auto industry and result in higher costs for consumers on both sides of the border.

“The auto supply chain is completely intertwined. A cost increase of this magnitude will drive consumers directly into the arms of Japanese car makers,” said Dias.

With files from The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

Road work is underway in Penticton so traffic controllers are asking drivers to be aware. (Submitted)
Message to Penticton drivers: Slow down and pay attention in Cone Zones

Over the last 10 years in B.C., 12 roadside workers died and 207 were injured

Meghan Thompson and her daughter Kennedy Lanteigne were awarded bravery awards on Saturday for helping to save the life of a baby drowning off a Naramata beach last June. (Submitted)
Penticton mom and daughter receive bravery awards for saving baby from drowning

Off duty Penticton fire captain also awarded for saving the boy’s life last summer in Naramata

princess margaret
Penticton high school has COVID-19 exposure days

Princess Margaret Secondary had potential days of exposure May 10-12

Brandon Messier of Messier’s Concrete and Landscaping has added some unique, glowing features to his front yard at 28 Huth Ave. (Submitted)
PHOTOS: Glowing boulders popping up in Penticton yards

Local landscaper Brandon Messier also brought the Lost statue to its new home

There is nothing left of a structure that burned down in rural Summerland Saturday night. (Monique Tamminga Western News)
Nothing left at fire scene in Summerland

Summerland firefighters arrived when the structure was fully engulfed in flames

An avalanche near Highway 1 in Glacier National Park. Avalanche Canada will benefit from a $10 million grant from the B.C. government. (Photo by Parks Canada)
Avalanche Canada receives $10-million grant from B.C. government

Long sought-after funds to bolster organization’s important work

Salmon Arm RCMP seize a handgun, drugs and cash at a Silver Creek property on Friday, May 14, 2021. (File photo)
Police seize handgun, drugs and cash at a Shuswap property

Salmon Arm RCMP said warrant for Silver Creek revealed cannabis, possible cocaine, magic mushrooms

Vernon Search and Rescue, along with Shuswap members, rescued three kayakers near Lumby Sunday, May 16, 2021. (VSAR Instagram)
3 kayakers rescued in North Okanagan

Shuswap, Vernon search and rescue teams make swift-water rescue Sunday

Salmon Arm RCMP are seeking witnesses to a single-vehicle collision that occurred on Highway 1 on May 16, 2021. (File photo)
Salmon Arm RCMP seek persons who transported injured driver, motorcycle to hospital

Motorcyclist involved in a single-vehicle collision on Highway 1

Pictured is a bear in Chilliwack in Sept. 17, 2008. (Jill Hayward/Contributed)
UPDATE: Bear has gone back to the woods, Kelowna police say

The BC Conservation Service has been notified of bear in Cameron Avenue area

Vancouver Canucks’ Jake Virtanen (18) and Calgary Flames’ Josh Leivo, front right, vie for the puck as goalie Jacob Markstrom, back left, watches during the first period of an NHL hockey game in Vancouver, on Saturday, February 13, 2021. THE CANADIAN PRESS/Darryl Dyck
Vancouver Canucks forward Jake Virtanen sued over alleged sexual assault

Statement of claim says the woman, identified only by her initials, suffered physical and emotional damages

A kite surfer gets some help out of the water from his wife and dog after the wind left his sails on Swan Lake Monday morning. (Jennifer Smith - Morning Star)
Downed parachuter on Swan Lake just a novice kite surfer

Emergency calls were downgraded after reports of a downed parachute changed

The first of the extended closures is wrapping up, with the Trans-Canada highway re-opening on weekends for travel. (Jack Stuemple photo)
Trans-Canada highway to open on weekends

The highway will be open starting on Friday for the long weekend

Rescue crews search for a missing diver in Okanagan Lake at Hot Sands Beach by the William R. Bennett Bridge on Sunday, May 16. (Michael Rodriguez/Capital News)
Missing Okanagan Lake diver presumed drowned, recovery efforts continue

Boaters are asked to stay away from the area as crews continue the search

Most Read