The U.S. is hitting Canada with tariffs on its steel and aluminum imports effective at midnight tonight and the CEO of Hamilton Chamber of Commerce says "immediately, this is going to unleash chaos."

Keanin Loomis said Thursday "I don't even think that customs on the US side really knows how to process this or what the instructions are from Washington. So, I think immediately it's going to clog up the borders tonight."

U.S. Secretary of Commerce Wilbur Ross made the announcement during a call with reporters Thursday morning. President Donald Trump announced in March that the United States would impose tariffs of 25 per cent tariff on imported steel and 10 per cent on imported aluminum, citing national security interests.

It's not going to work and that's the reason why we're really not panicking. - Gary Howe, president of United Steelworkers Local 1005

He granted exemptions to his North American Free Trade Agreement allies and the European Union, but those all were set to expire June 1.

Loomis says the steel industry is currently facing a tipping point on many fronts like higher labour costs in Canada and environmental regulations and this could be the thing that "sets it over the edge."

Loomis says there are 10,000 jobs directly related to the production of steel in Hamilton and those support another 30,000 spin off jobs.

Hamilton Mayor Fred Eisenberger says the announcement is "dismaying" and a shocking turn of events, "certainly one that we all thought didn't make any sense."

"I think the worst has happened and I think it's bad for not only Hamilton, but bad for trade between Canada and the United States and the EU quite frankly," said Eisenberger.

"It's going to hurt consumers in both Canada and the United States. Steel-related products have suddenly gone up 25 per cent if this 25 per cent comes to pass tomorrow"

'Steelworkers president 'really not panicking'

Gary Howe, president of United Steelworkers Local 1005, said the decision is going to create a huge mess at the border.

"It's not going to work and that's the reason why we're really not panicking," said Howe. "Initially it looks like it's just leverage to try to get a better deal on the free trade (NAFTA) agreement."

Steel is produced in five provinces, but production is concentrated mainly in Ontario. Aluminum is produced in Quebec and British Columbia, with Quebec the largest producer by far.

Canada is countering the United States' decision to slap punishing tariffs on steel and aluminum imports by imposing tariffs of its own.

Foreign Affairs Minister Chrystia Freeland said Thursday afternoon that Canada is hitting back with duties of up to $16.6 billion on steel, aluminum and other products from the U.S., including maple syrup, beer kegs and whiskies.

Around half of Canada's steel production is exported mostly to the U.S. and more than 80 per cent of aluminum production is exported to the U.S.

About 13 billion tonnes of steel is produced in Canada each year with approximately $14 billion in sales and about 3.2 million tonnes of aluminum a year with approximately $12 billion in sales.

'Americans will have to understand is that these measures by Donald Trump with softwood lumber, with steel, with aluminum are going to increase costs to the American people.' - Bob Bratina, now Liberal MP for Hamilton East — Stoney Creek

Finance Minister Bill Morneau announced late Wednesday that the government would bolster its measures to prevent foreign steel and aluminum from being dumped into the North American market, but it appears to have done little to prevent the U.S.'s punitive duties.

NAFTA

Former Hamilton mayor Bob Bratina, now Liberal MP for Hamilton East — Stoney Creek, told the CBC that Hamilton steelmakers "are going to have to review their growth plans in the face of today's announcement." Bratina, co-chair of the All Party Parliamentary Steel Caucus, says it's hard to say what impact the tariffs will have on Hamilton specifically, but says industries will have to "strategize."

Ross said Canada's and Mexico's exemptions were hooked to the progress of the NAFTA negotiations, which "are taking longer than we had hoped."

Bratina said the negotiations were "certainly not a success."

"The one thing," he said, "that Americans will have to understand is that these measures by Donald Trump with softwood lumber, with steel, with aluminum are going to increase costs to the American people for anything that they buy that's got wood, steel, or aluminum in it. It's going to cost them more."

In a statement released by Ontario NDP leader and Hamilton Centre MPP, Andrea Horwath said the announcement will immediately impose devastating tariffs on Canadian steel and aluminum – putting many thousands of good jobs in Ontario at risk.

"As a life-long Hamiltonian, I know the impact President Donald Trump's protectionist actions will have on families who count on good steel jobs," said Horwath.

Prime Minister Justin Trudeau called Ontario Premier Kathleen Wynne, Quebec Premier Philippe Couillard and Saskatchewan Premier Scott Moe, all in regions with large steel and aluminum sectors, on Wednesday to talk about the upcoming decision.

The Prime Minister's Office said they "all agreed to continue to defend the Canadian steel and aluminum industry from unwarranted tariffs and to stand up for the best interests of all Canadian workers and businesses."