U.S. drops 10% tariff on Canadian aluminum

The elimination of the 10% applies to non-alloyed, unwrought aluminum and is retroactive to September 1

Prime Minister Justin Trudeau | Government of Canada

What happened: The United States has resumed duty-free treatment of non-alloyed, unwrought Canadian aluminum, effective retroactively to September 1.

Why it matters: The announcement today eliminates a 10% tariff that was re-imposed in August. The change comes a day before a Canadian surtax on a number of U.S. aluminum exports was expected to take effect. 

The United States has conditionally dropped its 10% tariff on imports of Canadian non-alloyed, unwrought aluminum. 

The decision announced Tuesday is effective retroactive to September 1. The continued duty-free treatment of Canadian aluminum is contingent upon import levels matching or only minimally exceeding U.S. projections over the next four months. 

According to the Office of the United States Trade Representative (USTR), if imports exceed 105% of expected volumes in September or in any of the next three months, the U.S. will retroactively impose a 10% tariff on all imports made during that month.

The U.S. may also re-impose a 10% tariff moving forward.

The decision follows consultations with the Canadian government. The USTR expects imports of non-alloyed, unwrought aluminum to normalize in the final four months of 2020.

"The United States will consult with the Canadian government at the end of the year to review the state of the aluminum trade in light of trade patterns during the four-month period and expected market conditions in 2021," stated the USTR office in a news release.

The announcement comes a day ahead of when Canada was expected to impose a 10% surtax on a number of U.S. aluminum exports into Canada – a countermeasure to the United States' 10% tariff, which took effect August 16.