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Everything you need to know about the U.S.-Canada Trade Tariffs

Staying true to his love for mercantilism, Trump reimposed 10% tariffs on certain Canadian aluminium products.

He announced this on Thursday, in a move to protect the U.S. industry.

Canada retaliated the following day with an imposition of C$3.6 billion tariffs on U.S. aluminium products.

These retaliatory tariffs by Canada will come into effect September 16, after a consultation period with Canadian businesses that might be affected by the U.S. levy.

The counter-measure was announced after Canadian Deputy Prime Minister, Chrystia Freeland, had promised a “dollar-for-dollar” fight.

She called the U.S. tariffs “ludicrous”, and said that Canadian aluminium products are in no way a threat to national security.

"Any American who buys a can of beer or a soda or a car or a bike will suffer. In fact, the washing machines Trump stood in front of yesterday will get more expensive," she said.

Trump’s side of the story is that Canada broke the commitment that they made last year-- to stop flooding the U.S. market with cheaper aluminium products-- which caused the United States to re-impose tariffs.

Trump said that the move was "absolutely necessary to defend our aluminium industry”.

He said that there has been a surge in the amount of Canadian aluminium exports in recent months, despite a low demand in the U.S. market.

What’s the Reaction?

The U.S. Chamber of Commerce has warned that this decision can raise costs for U.S. aluminium manufacturers.

The National Foreign Trade Council called this a “misguided action” as well, saying that this move will undermine the new free trade agreement between the U.S., Canada and Mexico which came into force in July.

A group of 15 American aluminium executives claimed that they had government data discounting a “surge”, and that the import levels remain largely consistent with historical trends.

Canadian Prime Minister Justin Trudeau, as well as the Canadian Chamber of Commerce said that the tariffs imposed by the U.S. have “no justification” and it’s the “wrong instrument”.

While the majority of opinion holds against this move, Michael Bless, CEO of Century Aluminium, said that the move "helps to secure continued domestic production of this vital strategic material and level the playing field for thousands of American aluminium workers".

Only time will tell how this move will play out in the long run, and whether or not it will hurt the recovering economies of both the countries.

Reporter: Pranav Govil