Greater Niagara Chamber Expresses Disappointment, Alarm at U.S. Steel Tariff Decision

“Although President Trump has often targeted China in his rhetoric, even going to far as to label that country an “enemy” of the United States, Canada, the United States’ most important ally and trading partner, will be the most-affected country under these tariffs.” – Greater Niagara Chamber of Commerce

“(These) tariffs would only lead to further cost increases in the construction industry. …This would drive up the price of homes, renovations, commercial construction and public works projects.” – Ian Kowalchuk, Chief Business Development Officer at Merit Contractors Niagara

A News Release from the Greater Niagara Chamber of Commerce

Posted May 31st, 2018 on Niagara At Large

Niagara, OntarioIn a telephone call with reporters this morning (May 31, 2018), U.S. Secretary of Commerce Wilbur Ross announced that the United States would be levying tariffs on Canadian steel and aluminum imports, beginning at midnight.

The cost of constructing and buying homes in Niagara and other regions of Canada is one of the areas that could be hit hard by Trump’s punitive tariffs

The GNCC expressed its grave concerns about this policy in March, when it was first announced.

Although President Trump has often targeted China in his rhetoric, even going to far as to label that country an “enemy” of the United States, Canada, the United States’ most important ally and trading partner, will be the most-affected country under these tariffs.

Canada is the largest source of imported steel for the United States, with almost 17 per cent of all U.S. steel originating here – 88 percent of Canada’s total steel exports, worth $5.53-billion.

Canada is also the top exporter of aluminum to the United States, sending $7.2-billion worth of aluminum south last year. These tariffs, if enacted, would have a devastating impact on the Canadian steel and aluminum industries.

They would also cause a hike in U.S. consumer prices. Softwood lumber tariffs enacted last year have already driven up the prices of U.S. homes, for instance, and economists universally predict similar results for these proposed tariffs. A policy brief from the Trade Partnership indicates that 146,000 American jobs could be lost if the U.S. pursues this policy option, while over 150,000 Canadian jobs are held in the steel and aluminum industries and could be negatively affected.

The Government of Canada has announced duties of up to $16.6 billion on U.S. products in retaliation. The GNCC understands that the Government of Canada must take action in response but cautioned in March that this was precisely why it opposed the U.S. move in the first place, as it had the potential to start a trade war with unpredictable consequences for the economies of both countries.

Ian Kowalchuk, Chief Business Development Officer at Merit Contractors Niagara, reported that “previous announcements and rollbacks had already created uncertainty and led to cost increases of 25-30% on a wide range of construction materials. The tariffs would only lead to further cost increases in the construction industry.

“This would drive up the price of homes, renovations, commercial construction and public works projects. “In the near term,” Mr. Kowalchuk continued, “companies with existing contracts will now experience volatility between order and material purchase dates, price escalations during bidding, and a shortening of acceptance windows on proposals. Retaliatory measures would only add to these problems.”

The United States attempted a steel tariff in 2002 under President George W. Bush. Shortages of steel and delays in production resulted, 200,000 American manufacturing jobs were lost, and the WTO finally ruled the tariff illegal and authorized unprecedented sanctions and penalties against the United States. President Bush was forced to reverse the policy in 2003 in what the media dubbed a humiliating flip-flop.

China currently overproduces steel, and a U.S. tariff could leave China with excess inventory it might be tempted to dump on other markets, including Canada – meaning that the steel would be “dumped” on the Canadian market at below-market prices, posing a major secondary competitive problem for the Canadian steel industry.

The GNCC is a proponent of free trade and regularly works with its American counterpart, the Buffalo Niagara Partnership, having held a CanAm conference with them and the Hamilton Chamber of Commerce only yesterday.

The Buffalo Niagara Partnership stated that it “is concerned about today’s announced tariffs and other actions by the administration that risk the historic trading relationship between the United States and Canada which is essential to both our economies.

Buffalo Niagara is at the heart of a dynamic bi-national region. Our economy and many of its opportunities for growth are directly tied to Southern Ontario. Government policies should bind the United States and New York State closer to Canada, not create false barriers to trade, job creation and economic opportunity.”

The GNCC has spoken with Niagara’s Members of Parliament to voice its concerns and offer its support to them in their attempts to mitigate the damage caused by the American policy. We strongly oppose these tariffs and hope that U.S. legislators will act in the best interests of their economy and their citizens by abandoning this destructive course.

The Greater Niagara Chamber of Commerce is the largest business organization in Niagara and the third-largest Chamber of Commerce in Ontario, with 1,600 members representing 50,000 employees. More information on the GNCC is available at gncc.ca.

NIAGARA AT LARGE encourages you to join the conversation by sharing your views on this post in the space following the Bernie Sanders quote below.

A reminder that we only post comments by individuals who also share their first and last names.

For more news and commentary from Niagara At Large – an independent, alternative voice for our greater binational Niagara region – become a regular visitor and subscriber to NAL at www.niagaraatlarge.com .

“A politician thinks of the next election. A leader thinks of the next generation.” – Bernie Sanders

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2 responses to “Greater Niagara Chamber Expresses Disappointment, Alarm at U.S. Steel Tariff Decision

  1. Can anyone tell me if it is possible to find other markets for our steel and aluminum? It seems a little irresponsible to have 88% of our steel bound for a single market, in this case the U.S., especially when they have someone as unhinged as Trump sitting in the Oval Office. A diversification of markets seems to make more sense.

    Liked by 2 people

  2. Linda McKellar

    Agreed. All of our economic eggs should not be in one basket. There is always the EU, Commonwealth nations and Asia. Maybe we could export to North Korea and really tick off Trump. (joke) 🙂 DIVERSIFY.

    This will hurt the American economy too but Trump is either too stupid to realize it or is just, as usual, pandering to his equally clueless base. Trump’s brain development was arrested at a juvenile mentality and he cannot see repercussions of his actions or connect the dots of cause and result. He has flight of ideas, lacks concentration and mistrusts learned advisors, all signs of mental dysfunction.

    Trade wars eventually destroy economies on both sides. The US is progressively isolating itself economically and in many other ways. They cannot survive as an island for long. Their economy will tank.

    Meanwhile Trump is selectively supporting segments of the Chinese economy with which he has personal financial connections, recently letting it slip by expressing dismay at potential lost Chinese (not American) jobs while publicly declaring them crooks and money launderers. Somebody needs to remind him of the emolument clause. The guy sees only benefits for himself and is clever in that narcissistic regard but is definitely otherwise unhinged. When the US economy inevitably fails, it will cause a world wide depression.

    Liked by 1 person

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