Will Biden's Buy American plan hurt Canada? Check the fine print
CBC
There's a reason Canadian officials have been circumspect in reacting to the big Buy American boosterism in Joe Biden's state of the union address.
They're still trying to figure out, days later, what it does to Canada — if anything.
That speaks to a truism among trade wonks when it comes to Buy American policies: nevermind the headline, read the fine print.
The president drew a rare bipartisan standing ovation, and news headlines, by promising in his speech tougher Buy American rules for upcoming public-works projects.
That was the rhetoric. Next comes the harder part: the math. Specifically, how many actual dollars are at stake.
Canadian officials say they're awaiting assessments from industries Biden listed as Buy American priorities: Glass, lumber, drywall, fibre-optic cable and certain metals.
There's a thicket of unknowns to wade through including technical details still not released, promised exemptions, and a litany of free-trade agreements involving federal and state governments that will have a softening effect.
Ottawa isn't yet sure how many of these products are even being sold into the U.S. for public projects subjected to the new Buy American policy.
For starters, among the top 25 products exported by Canada to the U.S. in December, just two fall under the Biden policy: lumber and aluminum.
Canadian lumber companies have some protection: they've been buying up mills inside the U.S., in part to avoid U.S. duties.
Aluminum companies, meanwhile, will be gunning for exemptions: the rules allow exceptions when buying American costs 25 per cent more or hurts the public interest.
In the midst of this, the Canadian government plans to submit public comments as the U.S. solicits input over the next month for its upcoming policy.
What is clear is Canadian officials don't sound nearly as concerned as last year when the U.S. was designing discriminatory tax credits against non-U.S.-made cars.
Canada and Mexico feared serious long-term damage. In the end, they won a coveted exemption from the auto policy.
