Quebec's aluminum industry shaken despite temporary relief from Trump's tariffs

Quebec's aluminum and steel industry was handed temporary relief on Thursday, with Canada's exemption from the initial round of tariffs put in place by the United States.

U.S. said Thursday NAFTA talks could decide if exemptions stay or not

At the White House Thursday, President Donald Trump signed two proclamations, one on steel imports and the other on aluminum imports. (Susan Walsh/Associated Press)

Quebec business groups are sounding the alarm that Canada's temporary exemption from tariffs for its aluminum and steel exports to the United States isn't enough to ease their concerns caused by the climate of uncertainty.

President Donald Trump announced tariffs of 25 per cent on imported steel and 10 per cent on aluminum Thursday. Both come into effect in 15 days.

Canada, as well as Mexico, won't be included in the initial round of tariffs.

"We are relieved because the threat was enormous," said Yves-Thomas Dorval, the president of Conseil du patronat du Québec, a major employers group that promotes business interests in Quebec.

However, there's no guarantee that the exemption will last forever.

The tariff announcement comes as the U.S., Canada and Mexico continue to renegotiate the 24-year-old North American Free Trade Agreement.

"There are strings attached to this decision, and it is the NAFTA negotiations," Dorval said.

Yves-Thomas Dorval, President of the CPQ, wants the government to do everything in its power to ensure tariffs don't hit Quebec's steel and aluminum industries. (Navneet Pall/CBC )

Quebec's federation of chambers of commerce (FCCQ) released a statement saying it is "incomprehensible" that uncertainty about tariffs persists for its members. 

"These new surcharges announced today by the U.S. administration are unjustified and pose a threat to the economy of Canada and the United States itself," said Stéphane Forget, FCCQ president.

Pressure on NAFTA talks

With the current setup, the U.S. president is taking the position that if the U.S. doesn't get the concessions it wants from NAFTA talks, Canadian metal producers could soon find themselves subject to the same punitive tariff as everyone else.

"We're going to hold off the tariff on those two countries to see whether we can make the deal on NAFTA," Trump said.

Canada supplies more than a sixth of all the steel that the U.S. uses and more than 40 per cent of its aluminum.

The industry was in a tizzy at the threat of tariffs as Economic Development Minister Navdeep Bains tried to calm business leaders at a meeting in Montreal Thursday.

Minister Navdeep Bains said Canada will work to avoid situations where tariffs are imposed on steel and aluminium. ( Charles Contant/CBC)

Bains said applying the tariffs would ultimately not be in the best interest of the U.S.

"If you look at any tariff, it will have a negative impact on U.S. jobs and also on U.S. producers," he said, prior to the announcement.

Major industry in Quebec

With that as a bargaining chip, Prime Minister Justin Trudeau said he has a "level of confidence" that Canada will secure an exemption but that he will take it "one step at a time," since he's dealing with an unpredictable U.S. administration.

Next week, Trudeau will tour regions of Canada that are heavily reliant on the steel and aluminum industries in a show of solidarity for those who would be hurt most by stiff U.S. tariffs.

Marie Lapointe, the head of the AluQuebec, said manufacturers in the U.S. like General Motors, Ford and Toyota rely on Quebec suppliers to meet their aluminum needs.

Uncertainty surrounds whether the tariffs will ultimately impact Canada, but for now, workers are bracing for the worst. 

"They are taking this really seriously, but they wish it was a bad dream," Lapointe said before the tariffs were announced.

Trump has said the tariffs are needed to reinforce lagging American steel and aluminum industries and protect national security.

With files from Jaela Bernstien and Navneet Pall