As the White House and the United States Government continues to deliberate on its proposal to impose tariffs on steel and aluminum imports into the United States (U.S.), the Council of the Great Lakes would like to express its deep concern with the proposal.
Shared by eight states and the Canadian provinces of Ontario and Quebec, this economic region, which represented US$6.0 trillion in economic output in 2016, would equal the third largest economy in the world if it were a country, behind only the U.S. and China.
Additionally, home to 107 million people, this economic region is responsible for supporting some 51 millions jobs, or one-third of the combined American and Canadian workforce.
In short, while the Great Lakes economic region continues to evolve and revive itself in the new economy, it remains North America’s economic engine; an economy that is driven by deeply integrated, global industries, supply networks and value chains within and across a number of leading sectors, such as automobile manufacturing, aerospace, energy, transportation, and the defence industrial base.
The binational Great Lakes Region is also an important region for iron ore mining, as well as steel and aluminum production, critical inputs for the sectors above. In fact, many of the major companies involved in the steel industry, such as ArcelorMittal and Alcoa, operate seamlessly on both sides of the U.S. and Canadian border in the Region.
To illustrate the volume and value of iron ore flowing through the Region for steel production, one lock along the jointly managed Saint Lawrence Seaway, the Poe Lock/Soo Locks, has been deemed critical infrastructure by the U.S. Department of Homeland Security (DHS) and the U.S. Army Corps of Engineers (USACE).
Why is this relevant? If there was a six month failure at the lock, DHS and the USACE estimate that there would be a complete shutdown of Great Lakes steel production, 75% of U.S. integrated steel production would cease, 80% of iron ore mining would cease, nearly 100% of North American appliance, auto, construction equipment, farm equipment, mining equipment, and railcar manufacturing would cease.
This failure, economically, would lead to 11 million job losses in U.S., and even more if Canada and Mexico were included, and it’s estimated there would be a $1.1 trillion decrease in U.S. gross domestic product. Widespread bankruptcies and recession would also likely follow.
The latter demonstrates not only the significance of the iron ore mining and steel production industry to the Region, but also the national security and economic importance of the highly integrated industry that exists between the U.S. and Ontario and Quebec in Canada.
If tariffs are imposed on steel and aluminum imports by the U.S. federal government, U.S. consumers and the industrial base across the eight Great Lakes states, from New York to Minnesota, will be seriously impacted.
Therefore, the Council of the Great Lakes requests that the U.S. government and Congress carefully consider the impact that the proposed tariffs will have on places like the Great Lakes Region.
The Region’s economic recovery and advancement in today’s global climate of borderless trade and investment is highly dependent on being connected to Canada’s steel and aluminum exports.
