Trump offers immediate tariff relief to aluminum and steel companies that commit to U.S. expansion

The ruff governance is at present offering canadian river and Mexican aluminium and steel companies immediate tariff relief if they commit to moving production to the United States in the future.

The U.S published the notice on Thursday during a tense week that saw both American and Canadian officials publicly air their grievances. 

"It’s a very aggressive tactic by the United States," said international trade lawyer William Pellerin. "This really reinforces the approach that we’ve seen from the United States for a while now, which is simply: We win if you lose."

U.S. President Donald Trump’s trade policy is focused on using steep tariffs to try to push foreign companies of all kinds to move production to the U.S. As part of that strategy, the administration has been clobbering Canada’s aluminum and steel sectors with tariffs for more than a year, escalating to 50 per cent.

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Earlier this month, the U.S. Also changed how it applies metal duties to manufactured goods, hitting Canadian companies hard. 

"Many of our clients are laying off employees, closing facilities," said Pellerin, whose firm McMillan LLP represents companies facing American tariffs. "It is really painful to see these massive layoffs happen in Canada."

Canada hasn't been able to get back to formal negotiations for sectoral tariff relief from the U.S. Since talks broke off in the fall.

On Thursday, Prime Minister Mark Carney called Trump's sectoral tariffs a violation of North America’s free trade deal, which is up for review in July. He says Canada is ready to enter into detailed negotiations, or wait if it has to.

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The U.S. Had already announced its plans to directly offer Canadian and Mexican aluminum and steel companies tariff relief, but the notice on the U.S. Federal register this week officially opens the door.

The posting creates a formal process for Canadian steel and aluminum companies to submit evidence and receive relief on their shipments to the U.S. Now, if they invest in moving production south of the border later.

In the Oval Office on Thursday, Trump spoke broadly about his trade strategy that has put similar pressure on carmakers to move production south of the border. 

"Car companies are coming from Canada," Trump said. "They're coming from Mexico, Germany Japan."

Jean Simard, CEO of the Aluminum Association of Canada, said the American offer doesn’t make economic sense. 

"It doesn't make sense because you're talking about billions of dollars of investments, and you don't know where the price of metal will be in the course of those years. So it's like, fuzzy mathematics."

Catherine Cobden, president and CEO of the Canadian Steel Producers Association, said it's unclear how much uptake the U.S. Will get from her industry.

She said there's a lot of uncertainty because of the discretionary aspects built into the offer, and Canadian steel companies already have a lot of capital investment tied up in Canadian production.

"A steel plant is a huge investment," Cobden said. "You might have up to $1 billion or more of assets in your steel plant. That's significant value that you don't just shutter and walk away from, lock the doors and turns out the lights."

This new notice comes during a tumultuous week in Canada-U.S. Relations. 

Radio-Canada first reported that the U.S. Has a list of concessions it wants Canada to make before entering into formal talks about the Canada-U.S.-Mexico Agreement (CUSMA), which is up for review in July.

U.S. Trade Representative Jamieson Greer said on Wednesday that he wants American alcohol back on Canadian shelves in the provinces that banned it in retaliation for Trump's tariffs and threats.

Speaking out against sectoral tariffs on Thursday, Carney responded that he could make that happen quickly if the U.S. Makes progress in other areas.

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Canada-U.S. Trade Minister Dominic LeBlanc suggested it's unrealistic for Canada to expect the U.S. To drop its sectoral tariffs entirely because Trump hasn't given that deal to any country, but LeBlanc said the government is trying to get them reduced.

"They say that the sectoral tariffs to some extent will remain in place," LeBlanc told a crowd at the Globe and Mail’s INTERSECT conference on Wednesday.

LeBlanc said in October that Canada was "very close in terms of having a deal that would have significantly lowered these sectoral tariffs" until the U.S. Halted talks. Trump called off those trade talks with Canada, citing his anger over Ontario's anti-tariff ad.

"We say to them, we’re absolutely ready to resume the discussion where we were in October," LeBlanc said.

The U.S. Has set a date in May to enter into formal bilateral CUSMA talks with Mexico, but no date has been set for similar talks with Canada.

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