The US imposition of tariffs on Canadian aluminum provoked a furious reaction from Ottawa, with Prime Minister Justin Trudeau calling the duty "unfair"

Washington (AFP) - The United States said Tuesday it would no longer impose a 10 percent tariff on Canadian aluminum imports, following threats of retaliation from Ottawa.

The duty-free treatment will be retroactive to September 1.

However, the Office of the US Trade Representative (USTR) published a list of expected maximum monthly shipments of aluminum, and warned it will reimpose the tariff if imports exceed those amounts.

“After consultations with the Canadian government, the United States has determined that trade in non-alloyed, unwrought aluminum is likely to normalize in the last four months of 2020, with imports declining sharply from the surges experienced earlier in the year,” USTR said in a statement.

“Accordingly, the United States will modify the terms of the 10 percent tariff imposed in August.”

US President Donald Trump had exempted Canadian products from tariffs as part of the USMCA free trade deal between the two countries and Mexico.

But in August, he ordered the 10 percent tariff on aluminum starting on August 16, citing a 27 percent “surge” in imports from Canada that posed a threat to domestic production.

The decision sparked a furious reaction from Ottawa, which said it would hit American aluminum products with Can$3.6 billion (US$2.7 billion) in counter-tariffs.

The Canadian aluminum industry employs about 10,000 people, and earlier on Tuesday, Prime Minister Justin Trudeau called the new tariffs “unfair.”

Ottawa had been expected to roll out its list of items subject to the retaliatory measures on Tuesday, before the US made its announcement.

A preliminary list published by the Canadian government included soda and beer cans, bicycles, golf clubs and washing machines.

USTR said it would consult with the Canadian government at the end of the year to review activity over the last four months as well as its expectations for 2021.