Canadian companies and a major union said on Wednesday higher US tariffs on steel and aluminum could result in more job losses and lost sales, as Prime Minister Mark Carney said Canada is preparing reprisals.
The US tariff hike on the two metals to 50% from the 25% rate introduced in March took effect at 12:01 a.m. (0401 GMT) on Wednesday.
Canada is the largest seller of the metals to the US, exporting to its southern neighbor roughly twice as much aluminum as the rest of the top 10 exporters’ volumes combined.
“So this is going to have a very quick impact, I will say to you, on steel industry,” said Lana Payne, president of Unifor, which is Canada’s private sector union.
The Aluminium Association of Canada, which counts Rio Tinto among its members, said 50% tariffs could result in its members diversifying to Europe.
Tim Houtsma, CEO of Nova Scotia-based Marid Industries, a medium-scale steel fabricator, told Reuters that the tariffs make it impossible to sell to the United States.
“We are going to tighten our belt and we are going to need to watch our cost because we are going to be shut out of the US market for some period of time,” Houtsma said.
Canada is prepared to strike back against the United States if talks with Washington to remove tariffs do not succeed, Prime Minister Mark Carney said on Wednesday.
“We are in intensive negotiations with the Americans, and, in parallel, preparing reprisals if those negotiations do not succeed,” he told the House of Commons.
Unifor called on Carney to retaliate immediately and urged Canada to pause exports of critical minerals to the United States. Hundreds of Canadian steel workers have lost their jobs since initial tariffs took effect. Unifor warned layoffs in the auto and aerospace industries could also occur.
In March, Canada imposed 25% tariffs on C$29.8 billion ($21.79 billion) worth of imports from the US Carney has said previously there is a limit to how far Canada can go in imposing tit-for-tat tariffs.
Jeremy Flack, CEO of Flack Global Metals, a US-based steel trader and manufacturer, said the tariffs have led to a pause of orders and reduced demand for steel.
“We are not getting any orders. Volumes starting from February have begun to decline,” Flack said.
($1 = 1.3674 Canadian dollars)
(By Divya Rajagopal and David Ljunggren; Editing by Caroline Stauffer; Richard Chang, Andrea Ricci and Sandra Maler)
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