What the cement tariff reversal could teach Canada about dealing with Trump

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Photo by Zak Bennett/Bloomberg via Getty ImagesThe United States dropping its 50 per cent tariff on Canadian cement may offer a lesson for other industries caught in the trade war, with pressure from U.S. businesses hurt by tariffs helping to make the case for relief, according to some observers.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountThe Donald Trump administration on Tuesday said it was removing cement and a handful of other products from its tariff list less than three weeks after the levy took effect, even as new tariffs were imposed on other Canadian goods, including motorcycles and dairy products.Cement manufacturers and their customers in the U.S. had warned the country does not produce enough cement to meet domestic demand, leaving them reliant on Canadian supply and exposed to higher costs due to the tariff.SUBSCRIBER EXCLUSIVE: FP West: Energy Insider brings you behind the oilpatch’s closed doors with exclusive insights from insiders every Wednesday morning.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of FP West: Energy Insider will soon be in your inbox.We encountered an issue signing you up. Please try againAmong those pressing Washington for relief was the National Precast Concrete Association, whose chief executive Nick Rhoad said the organization specifically asked for the cement tariff to be removed and believes its concerns were heard.“Yes, I’m very convinced that the message got through to them,” he said. “They have been very willing to listen to our industry and our manufacturers.”The association represents nearly 700 precast concrete producers whose products are used in roads, bridges, sewer systems and other infrastructure.Rhoad said the association contacted Washington to explain what the tariff would mean for U.S. manufacturers, although he declined to identify who the association specifically spoke to. It also met with the White House earlier this year about the importance of the precast industry.Republican Sen. Susan Collins of Maine raised the cement tariff directly with U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick, warning that businesses in her state relied on Canadian cement and had few alternatives.Carlo Dade, director of international policy and the New North America Initiative at the University of Calgary, said the cement reversal reflects a broader process underway in Washington as the U.S. learns which tariffs it can maintain without inflicting too much damage on its economy.“You have a battle within the U.S. between those who benefit from higher tariffs … and industries who are hurt as the price goes up,” he said.But U.S. industries hurt by tariffs do not always win that battle.Dade pointed to aluminum as a counterexample. The U.S. does not produce enough aluminum to meet domestic demand, leaving its companies dependent on imports and exposed to higher costs from tariffs, yet those tariffs remain.Competing interests have always sought to influence U.S. trade policy, he said, but that process has become more troubling under Trump.“The corruption involved in the manipulation of trade policy has gone from something quietly tolerated out of necessity, political necessity, to a more blatant manifestation of abuse of power under the Trump administration,” he said.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.The competition among stateside interests helps explain why finding U.S. allies matters for Canada.“Canadians don’t vote in U.S. elections,” Dade said. “We’ve always relied on U.S. allies.”In the case of cement, Rhoad said precast manufacturers could not simply stop working when the tariff took effect. Companies had projects already under contract, making it difficult or impossible to pass the unexpected cost onto customers.The tariff also meant higher bids and greater uncertainty on new project bids. Now that the tariff is removed, he said manufacturers can continue buying Canadian cement and bidding competitively on infrastructure projects.“I wouldn’t even call it damage done or manageable,” he said of the short-lived tariff. “I would call it avoided.”Rhoad said the decision shows the administration can reconsider a tariff when U.S. manufacturers demonstrate that it is hurting them.“They changed their mind and they heard what we had to say,” he said.But Dade cautioned against treating the cement decision as evidence that Trump is abandoning his broader tariff strategy.Based on the agreements the U.S. has reached with other countries, he expects Washington to ultimately maintain a baseline tariff of 10 per cent to 15 per cent while making carve-outs where tariffs would cause significant harm to the U.S. economy.“What you see with cement is a potential,” he said. “But that’s industry by industry. That’s not the entire U.S. trade policy.”Dade said the lesson for Canadian industries still seeking tariff exemptions is the need to identify the U.S. industries being hurt, not just demonstrate the damage tariffs cause in Canada.“If you’re going to win this, you’re going to have to win it through those industries that are specifically harmed,” he said.We apologize, but this video has failed to load.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.