Sisters and Brothers,
As many of you have heard, the Trump administration has called for the U.S. Department of Commerce to investigate tariffs or other trade penalties on car and auto-part imports based on Section 232 of the U.S. Trade Expansion Act, a trade provision that allows duties on imports that threaten national security.
It’s clear that Canada’s auto sector is not a threat to America’s security but what remains unclear is the motivation or the actual target of any potential tariffs. It is possible that this is yet another NAFTA bargaining tactic to pressure Canada and Mexico into signing a quick deal. It is also possible that Trump is using Section 232 as a political tool to deliver one of his so-called ‘wins’ in the absence of a new NAFTA prior to the U.S. midterm elections.
The announcement came as a complete surprise, catching international governments, auto manufacturers and the markets off guard. Unifor is in the process of ascertaining possible ramifications of this action.
Unifor has previously proposed a major rethink on North American auto tariffs, which are far weaker than other auto-producing regions around the world. Rebalancing trade between North America and the world can help manage the disproportionate rise in car imports and the migration of good paying jobs to ever-cheaper labour markets. These are serious issues that need serious thought. Unfortunately, the shotgun approach Trump has taken under Section 232 could cause chaos in the sector and inflict severe collateral damage to both Canadian and American auto workers.
Under Section 232 the U.S. Department of Commerce has approximately 9 months to report its findings to the President who then has 3 months to determine what action, if any, will be taken. This is the same process used to impose steel and aluminum tariffs, which Canada is exempt from until next week’s scheduled expiry date of June 1, 2018.
In addition to the threat of tariffs on steel, aluminum and now potentially auto and auto parts the U.S. has aggressively come after Canada’s softwood lumber and paper industries. The U.S. had also attempted to slap punishing tariffs on aerospace exports. In NAFTA, the U.S. is also demanding greater market access to Canada’s dairy and poultry industries.
Unifor has called on the federal government to take a firm stand against the threat of all unjust tariffs and has made it clear that our union will vigorously oppose any attack on Canadian jobs and workers.
For information on this and other trade-related matters, please be sure to visit unifor.org/NAFTA
Jerry Dias, Unifor national president