Everyone agrees that Canada is not the "bad actor" the Trump administration seeks to punish by skirting international trade rules and slapping sanctions on U.S. steel and aluminum imports.
That would be China. But if Canada gets hurt in the process, the decider says, well, too bad.
When a bipartisan group of senators last week warned Donald Trump about the impact on Canada of invoking "national security" motives to limit metal imports, the President snapped: "Canada has treated us very, very unfairly when it comes to lumber.… And they have not been easy when it comes to Wisconsin and our farmers.… It's a very double-edged sword."
Three days later, the U.S. Commerce Department presented its recommendations to Mr. Trump for cracking down on steel and aluminum imports that "threaten to impair the national security." Under a rarely used section of U.S. trade law, the White House now has until mid-April to decide whether to impose tariffs and/or quotas on billions of dollars worth of imports.
The last time a U.S. administration invoked Section 232 of the Trade Expansion Act to crack down on imports of commodities deemed critical to national security – on steel products under George W. Bush in 2001 – the measure backfired badly. Prices soared, hurting U.S. consumers of steel, especially in the construction and auto industries. In the end, more U.S. jobs were lost than gained.
What's more, the Commerce Department repeatedly heard from experts and industry representatives that steel and aluminum imports do not constitute a threat to national security. The U.S. defence industry has ample domestic supply to meet its needs. And Canada, a staunch ally, is the biggest foreign supplier of both commodities, accounting for 43 per cent of aluminum and 17 per cent of steel imports.
But don't expect Mr. Trump to be moved by the evidence.
"I want to keep prices down, but I also want to make sure that we have a steel industry and aluminum industry, and we do need that for national defence," Mr. Trump told senators in last week's White House meeting. "If we ever have a conflict, we don't want to be buying the steel from a country that we're fighting because somehow that doesn't work very well."
Unless Mr. Trump is considering declaring war on Canada, that is unlikely to ever be the case.
But of course, this is not really about national security at all, but about Mr. Trump's desire to show laid-off steel and aluminum workers that he is standing up for them. If placing blanket tariffs and quotas on steel and aluminum leads to the creation of a single new job at a U.S. steel plant or aluminum smelter, the President can claim he is doing what he was elected to do.
While Canada has plenty of friends on Capitol Hill and in U.S. industry pressing the administration to exempt America's northern neighbour from any Section 232 tariffs, U.S. Commerce Secretary Wilbur Ross suggested that Canada could at the very least face a quota capping its exports to the United States at 2017 levels. That would prevent Canadian steel and aluminum producers from increasing exports to fill the gap left if other foreign producers are shut out of the U.S. market.
"While the United States has many allies that produce steel, relying on foreign-owned facilities outside the United States introduces significant risk and potential delay for the development of new steel technologies and production of needed steel products, particularly in times of emergency," the Commerce Department said in its report to the administration.
Commerce noted that 10 U.S. steel plants have closed and 35 per cent of steel industry jobs have disappeared in the past two decades, as global capacity has more doubled. While China is identified as the main culprit in creating a global steel glut, most of its imports reach the United States indirectly through other Asian countries.
Canada, meanwhile, shipped 5.4 million tonnes of steel worth $5.9-billion across the border in 2016.
More than a dozen U.S. aluminum smelters have closed in the past decade, while only two of the five that remain are operating at capacity levels. Employment fell by 58 per cent in the three years to 2016 alone. Canada exported $9.3-billion worth of aluminum products to the United States in 2017, including 2.2 million tonnes of primary aluminum.
Anglo-Australian metals giant Rio Tinto and U.S.-based Alcoa Inc. have invested heavily in their Quebec smelters in recent years and count on low-cost hydroelectricity to provide them with a cost and environmental advantage over U.S. competitors. And in 2015, Rio Tinto completed a major modernization of its Kitimat, B.C., smelter, doubling capacity to 420,000 tonnes.
But persuading Mr. Trump to exempt Canada from any actions against steel and aluminum imports may prove no easier than saving the North American free-trade agreement.
Konrad Yakabuski