Trump reimposing tariffs on Canada’s aluminum is ‘all political’: Fmr. U.S. Ambassador to Canada

Bruce Heyman, Former U.S. Ambassador to Canada & Author of “The Art of Diplomacy: Strengthening the Canada US relationship in times of uncertainty” joins Yahoo Finance’s On The Move panel to share his thoughts on President Trump’s decision to reimpose tariffs on Canada’s aluminum.

Video Transcript

JULIE HYMAN: We were just talking about increasing tensions between the US and China, but here was an unexpected move. The president has reimposed a 10% tariff on some Canadian aluminum products. He said he was doing it to protect US industry. This was something that had been somewhat settled. There was a prior tariff that then had been taken off because there was a deal that was reached. So not sure what is coming-- what's happening at this point, but let's talk to Bruce Heyman about it. He is former US ambassador to Canada, and he's also the author of "The Art of Diplomacy-- Strengthening the Canada-US Relationship in Times of Uncertainty." He's joining us from Colorado.

So, Ambassador, it's always good to see you. This feels like this was a surprise. Was it a surprise, and what's going on here? Was there some sort of behind-the-scenes breakdown in the relationship that triggered this?

BRUCE HEYMAN: So over the last few weeks, I became aware of these discussions taking place, that the US very frustrated with the raw-aluminum quantities relative to finished aluminum coming across the border from Canada, and I know that they were having discussions back and forth.

But here's the reality. We just implemented the new NAFTA, the USMCA five weeks ago. The ink is barely dry. Canada is our best friend, next-door neighbor, best trading partner because, really, the trade is balanced.

This is political. This is solely political. Let's be realistic. We're less than 90 days to go here in an election where the president's down in the polls. He's got a huge pandemic problem, and he's just taking shots here to try to change the narrative. You see what's going on, and you've talked about it here on the show with regard to China, but this is Canada, and this is our best friend and ally.

Now, they have announced today that they're going to retaliate, and they're going to go dollar for dollar on aluminum back to the United States. So who's going to win here? Nobody is going to win. The consumer's going to pay more. It's going to impact jobs. And, no, Canada doesn't pay the tariff. We've gone through this before. Our consumers are going to pay it.

So I'm here as the former US ambassador to Canada. I'm just going to directly say this, that Donald Trump should suspend the implementation of these tariffs and use diplomacy. Use negotiation. Talk to our friend and ally because this is a lose-lose-lose situation where the consumers will lose, American jobs will be affected, and diplomacy-- I'm telling you, he's already damaged the Canada relationship significantly, but this is just another dagger into that relationship.

ADAM SHAPIRO: Ambassador--

BRUCE HEYMAN: And so I think we need to-- we need to get something straightened out here pretty soon.

ADAM SHAPIRO: I realize former ambassador to Canada, but the protocol, we still address you as Ambassador. And I'm curious, though, was there any legitimacy to the complaint? I know two large companies were lobbying the administration for these tariffs. Is there any legitimate complaint that the United States might have in taking this action?

BRUCE HEYMAN: So I would say there are always legitimate issues with regard to trade between Canada or other countries, but here we are at a point in time where any legitimate issues could and should be resolved through diplomacy, through negotiation, especially now that you've just completed agreement.

The second thing is some of the definitional terms within the standstill that took place on the steel and aluminum tariffs talked about the word surge, and that definition needs to be agreed to, but the president and the team did not get to that point where they were even agreeing to the language within it. This is clearly political. This is clearly a move meant to change the subject away from a pandemic and a failing, you know, political campaign that's going on and trying to reboot it.

So he's doing the China stuff that you've talked about. He's hitting Canada, which he said they take advantage of us all the time. Are you serious? I mean, you know, he said that yesterday, and I almost fell out of my chair. Does anybody in the United States legitimately believe Canada is taking advantage of the US all the time? I don't think so.

And so I just-- I just think that we go down these slippery slopes and creating trade wars and conflicts just for political gain, and I think it's a dangerous time.

DAN HOWLEY: Ambassador, that's what I wanted to ask is does this lead to a trade war then with Canada, and what is the political benefit of a trade war with Canada?

BRUCE HEYMAN: Yeah. So, first of all, there's no benefit to a trade war with Canada, and so here's the slippery slope. OK, so yesterday the president announces he's slapping 10% on Canadian raw aluminum coming in. Today, the Deputy Prime Minister Chrystia Freeland, who we all remember from the negotiations during the NAFTA agreement, she announces dollar-for-dollar reciprocal tariffs going to be imposed back on the United States. And then they're going to be looking at things like exercise equipment and washing machines and the things that we make that we would be selling to them.

And so now what does the US do? Are they going to then say, oh, now that you've done this, now we're going to go with steel or going to go with something else? And so then it just continues to go tit for tat, and then we have a bigger problem. And if we do nothing and it's just even tariffs on both sides, I don't think that accomplishes anything. So I think that this is-- this is not a good path, and it's clearly a political distraction.

JULIE HYMAN: Ambassador Bruce Heyman, former United States ambassador to Canada. When you come back next time, maybe a little closer to the election, we're going to ask you about your work with the Biden campaign and voters outside of the United States, but we have to leave it here for now. Great to see you. Thank you so much for joining us.

BRUCE HEYMAN: Good to see you as well.