Manufacturing supply chains contribute to North American national security, according to the American Chamber of Commerce in Canada (AmCham Canada).
According to its analysis, the tariff imposed by the United States on Canadian aluminum is a clear example of the difficulties involved in this policy. Replacing Canadian aluminum with domestic production, as sought by the current 50% levy, would take decades and cost tens of billions of dollars. It would also require additional electricity generation comparable to that of the state of Nevada.
Manufacturing supply chains
The USMCA’s central commitment is to maintain free trade in North America, with limited exceptions linked to corrective measures and certain specific sectors. This principle has sustained regional integration for decades.
In recent years, the United States has imposed new tariffs under Section 232 of the Trade Expansion Act of 1962, which authorizes tariffs on imports that allegedly threaten national security.
However, according to AmCham Canada, imports from Canada and Mexico—such as steel, aluminum, automobiles, commercial vehicles, copper, and wood—do not pose a real threat to U.S. national security. On the contrary, these products are an essential part of the integrated supply chains that sustain the competitiveness of the entire region.
“These North American manufacturing and natural resource supply chains contribute to continental and global security,” it said in a letter sent to the U.S. Trade Representative (USTR) as part of consultations on the review of the USMCA.
National security
Congress recognized Canada as an integral part of the U.S. defense industrial base under the Defense Production Act of 1993.
Canada is also one of four countries considered a formal part of the U.S. national defense and technology industrial base (BIND).
“It is unreasonable to claim that imports of these goods from a close ally pose a threat to U.S. national security when such imports are essential to the competitiveness of U.S. industry,” argued AmCham Canada.
The USMCA transformed global trade and strengthened North America’s economic security. The rules of origin for the automotive industry marked a milestone in the quest for more balanced and reciprocal trade, one of the main objectives of the American Chamber of Commerce in Canada’s Joint Review.
Over the years, the ability of manufacturers and their suppliers to take advantage of the continent’s integrated supply chains has strengthened their competitiveness. It has also helped keep costs low, generating benefits for the entire region.
The United States ranks as the world’s second-largest automobile producer, while Canada and Mexico remain among the top destinations for its automotive exports.