Foreign Policy

The Canadian ladies who modified Trump's thoughts about tariffs

When the administration of US President Donald Trump decided to reintroduce tariffs on Canadian aluminum in August – claiming there was too much aluminum heading south to the US – it looked like an election campaign. After all, two US companies in red states that were vital to Trump's re-election had actively pushed for tariffs to return.

Given the stakes, Canadian policymakers considered it unlikely that tariffs would be lifted before the November 3rd US presidential election. Ottawa tried, however, to overturn Washington’s decision. And surprisingly it worked.

Washington resigned on September 15. It was a Canadian victory in that final battle, won through skillful coordination and the imposition of counter tariffs. And the negotiators were credited with changing Trump's mind? They are all women.

"The decision of the US government yesterday to remove unjustified tariffs on Canadian aluminum was correct," said Canada's Prime Minister Justin Trudeau on September 16. He thanked Deputy Prime Minister Chrystia Freeland, Minister for Small Businesses Mary Ng, and Ambassador to Washington Kirsten Hillman, the first woman to represent Canada in Washington, "for their hard work on this important issue."

"We had a trio of impressive Canadian women who probably happened to be at the forefront of the negotiating decision and influencing the intersection," said Jean Simard, president of the Canadian Aluminum Association. "These women were very hardworking and knew their files as if you were only seeing people at this level, which gave them an advantage."

Freeland, the most famous of the three, has been a resident problem solver since the beginning of the Trudeau government in Ottawa. As Secretary of State, she successfully renegotiated the US-Mexico-Canada Free Trade Agreement (USMCA) and was recently appointed Deputy Prime Minister. In this role, she takes care of the sometimes tense relationships between the Canadian provinces. In August, Trudeau named Freeland minister of finance after the incumbent minister resigned over the government's involvement in a corruption scandal.

Even after leaving the State Department, Freeland has remained an integral part of the relationship between the US and Canada. Hence their involvement in changing Washington's mind about aluminum tariffs was not surprising. But she didn't do it alone. Rather, Freeland combined her diplomatic expertise with the expertise of Ng and Hillman. Hillman, Canada's Ambassador to Washington, has a long résumé on US-Canada trade relations. Ng is a veteran MP who inherited the Government of Canada's export promotion and small business portfolio in 2018.

Catherine Loubier, Quebec's representative in New York, was also critical of Washington's surprise in August. Quebec is by far Canada's largest aluminum producer. Aluminum is therefore one of Loubier's top priorities. ("Quebec has 30,000 jobs and 1,500 businesses," she said.) Long before the summer tariffs went into effect, she had launched a nationwide campaign in the United States.

Together, the women were able to speak with one voice to counter Trump's claims that Canada is "taking advantage of us as usual" and that Canada's aluminum poses a threat to national security.

Trump's claims that Canada took advantage of the US on aluminum relate to the pandemic. In June, Robert Lighthizer claimed that US imports of Canada's aluminum "rose above historical levels" from May 2019 to June 2020. Canada argues the surplus is awkward. Before the pandemic, in early 2020, exports of Canadian aluminum to the US declined due to railroad blockades in Canada. However, when the pandemic broke out, Canadian smelters – like elsewhere in the world – were not shut down and continued to produce and export raw materials. What the US government failed to take into account is that exports of Canadian raw aluminum actually increased in the summer while exports of other aluminum products decreased.

"We closed the economy," said Freeland, "especially the manufacturing economy, and that had an impact on the composition of our aluminum exports to the US." Canada's aluminum production depends on access to cheap hydropower – which makes it difficult for American companies to compete. Two US companies, Magnitude 7 and Century Aluminum, pressured the Trump administration to reintroduce tariffs.

Magnitude 7 claims it was saved by the first collective bargaining round; In early 2020, the company warned that its losses could cause it to close. Meanwhile, the US Aluminum Association opposed the new tariffs, saying that after the successful USMCA negotiations, "it would be a shame to go backwards by re-applying tariffs or quotas on aluminum". But both Magnitude 7 and Century Aluminum are in key states for Trump's re-election – Kentucky and Missouri, respectively – suggesting that Trump's tariffs may have been less of an economic strategy than electoral deals.

Century Aluminum and Magnitude 7 did not answer any interview requests.

With US firms at the center of Trump's push, the Quebec mission chose to reach out to as many US officials as possible and launch a pro-American counter-argument against tariffs, rather than focusing solely on the Canadian side of the equation. Products made in the USA and Canada often cross the border throughout production, so tariffs can also be detrimental to manufacturers in the USA. "(This) was not an operation where we were just trying to get them to know that this was happening," Loubier said. "It really put some kind of fire under a desk and said how that affects you."

The Canadian team also developed a dollar-to-dollar counter-tariff strategy to be implemented two hours after Washington changed its mind. According to CBC News, "the preliminary list of counter-tariffs contained a disproportionate number of products from US swing states that will determine Trump's fate in the November 3rd presidential election."

In the end, as Freeland noted, "the United States … decided to unilaterally raise its tariffs". Part of that was the Canadian team's negotiations, but part of it was new data that painted a different story than the one presented by the Trump administration. Data released in August showed that the aluminum trade balance between the US and Canada became more balanced over the past year and there was no increase in Canada's total exports. "Facts are facts and evidence is evidence," said Loubier.

While the danger of tariffs still looms – they could be technically reintroduced at any time – the storm is over for the time being. The coronavirus pandemic has rocked relations between Canada and the United States, and leaders are focused more on rebuilding than on further tensions. That summer, Loubier partnered with the Canadian American Business Council to launch the North American Rebound, a campaign aimed at raising business voices against protectionism. To date, 654,400 companies and chambers of commerce in the US and Canada have signed the initiative.

Working closely with Loubier at North American Rebound is the President of the Canada-USA Chamber of Commerce, which in turn is a woman: Maryscott Greenwood. But Ottawa isn't celebrating just yet. Canada understands that it's always running on eggshells with the Trump administration. "There are no guarantees for the future," said Freeland, "as we have learned there are (none) in our trade relationship with this government."

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