Canada Hits Back at U.S. With Dollar-for-dollar Tariffs on Steel, Aluminum
Tariffs amounting to 25% on imported steel and 10% on aluminum announced by Commerce
Catharine Tunney
CBC News
May 31, 2018 7:28 AM ET
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 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.
She and Prime Minister Justin Trudeau made the announcement side by side hours after U.S. Secretary of Commerce Wilbur Ross confirmed the U.S. is following through on its threat to impose tariffs of 25 per cent on imported steel and 10 per cent on imported aluminum, citing national security interests.
The government is soliciting consultations on its plans until June 15. The new Canadian tariffs would kick in July 1.
Trudeau called the Trump administration's national security argument "inconceivable" and called the tariffs "an affront to the Canadians who died" alongside Americans in battle.
Before today's announcement of Canada's countermeasures, a senior government source with direct knowledge of the talks said the cabinet committee on Canada-U.S. affairs met Thursday morning to discuss an appropriate response, describing its efforts as "finding a sweet spot."
The source said the challenge was coming up with a response that makes sense and allows Canada to be a "credible country."
About 90 per cent of Canada's steel exports head to the United States, according to the Canadian Steel Producers Association. Steel is produced in five provinces, but the industry is heavily concentrated in Ontario.
U.S. President Donald Trump had granted exemptions on the tariffs to his North American Free Trade Agreement allies and the European Union, but those were set to expire June 1.
Trump's new tariffs prompt trade war talk, but by themselves are unlikely to hurt the global economy
During a call with reporters Thursday morning, Ross said Canada's and Mexico's exemptions were linked to the progress of the NAFTA negotiations, which "are taking longer than we had hoped."
Mexico, EU to retaliate
Mexico responded swiftly with tariffs of its own on U.S. exports of pork bellies, grapes, apples and flat steel, the Associated Press reported.
The EU also announced it would launch a dispute settlement case at the WTO and impose "rebalancing measures."
"Today is a bad day for world trade. We did everything to avoid this outcome," said EU Commissioner for Trade Cecilia Malmström.
"The U.S. has sought to use the threat of trade restrictions as leverage to obtain concessions from the EU. This is not the way we do business."
Ross tried to deflect suggestions the tariffs would damage ongoing NAFTA talks and the upcoming G7 meetings in Quebec.
"If any of these parties does retaliate, that does not mean that there cannot be continuing negotiations," Ross said.
"They're not mutually exclusive behaviours."
He did allow some leeway, saying the U.S. could be flexible.
"We continue to be quite willing, and indeed eager, to have further discussions," Ross said.
Security reasoning questioned
Conservative MP Erin O'Toole said Canada should be treated differently than the EU when it comes to security.
"Very disappointed that despite Canada being the most closely integrated security partner for the United States, Trudeau was unable to secure a deal to treat our industries and our workers fairly," he said.
Canada's procurement minister cast doubt on the U.S.'s national security justification.
"It is very difficult to fathom that there would be a security risk imposed by Canada on the United States," said Public Services and Procurement Minister Carla Qualtrough, She was in Ottawa attending Cansec, Canada's largest annual arms show.
She said the federal government has "contingency plans" in place to absorb the impact of U.S. tariffs on steel and aluminum on defence projects.
Multi-billion-dollar programs to buy new fighter jets and warships are all heavily dependent on the price of steel.
"We prepare for this kind of thing," said the Delta MP. "There is money set aside, whether it be for tariffs or for interest rate fluctuations, so we can proceed with our defence procurement should there be additional costs associated because of tariffs or other unexpected circumstances."
'Not the action of a friend'
On Wednesday, Trudeau called Ontario Premier Kathleen Wynne, Quebec Premier Philippe Couillard and Saskatchewan Premier Scott Moe, all in regions with large steel and aluminum sectors, 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."
Wynne called Trump a "bully" and urged the federal government to push back.
"We need to hit Trump where it hurts — in his wallet," the premier — currently fighting to keep her job in Ontario's provincial election — said Thursday. "This short-sighted decision is an attack on Ontario's steel industry and its workers. It is not the action of a friend, an ally or economic partner."
She also called on her provincial political rivals to come together to speak with one voice.
Couillard, whose province is the country's largest producer of aluminum, called the tariffs "illogical."
"It's a bad decision for the Americans. They're increasing manufacturing and defence industry costs," he said in French.
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
Canada's attempt to thwart the tariffs came in concert with its European allies, who were also trying to stop the U.S.
Both Trudeau and French President Emmanuel Macron made their cases separately to the U.S administration, while other European officials met with their U.S. counterparts in Paris on Thursday.
With files from the CBC's Katie Simpson, Murray Brewster and The Associated Press
Catharine Tunney
CBC News
May 31, 2018 7:28 AM ET
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 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.
She and Prime Minister Justin Trudeau made the announcement side by side hours after U.S. Secretary of Commerce Wilbur Ross confirmed the U.S. is following through on its threat to impose tariffs of 25 per cent on imported steel and 10 per cent on imported aluminum, citing national security interests.
The government is soliciting consultations on its plans until June 15. The new Canadian tariffs would kick in July 1.
Trudeau called the Trump administration's national security argument "inconceivable" and called the tariffs "an affront to the Canadians who died" alongside Americans in battle.
Before today's announcement of Canada's countermeasures, a senior government source with direct knowledge of the talks said the cabinet committee on Canada-U.S. affairs met Thursday morning to discuss an appropriate response, describing its efforts as "finding a sweet spot."
The source said the challenge was coming up with a response that makes sense and allows Canada to be a "credible country."
About 90 per cent of Canada's steel exports head to the United States, according to the Canadian Steel Producers Association. Steel is produced in five provinces, but the industry is heavily concentrated in Ontario.
U.S. President Donald Trump had granted exemptions on the tariffs to his North American Free Trade Agreement allies and the European Union, but those were set to expire June 1.
Trump's new tariffs prompt trade war talk, but by themselves are unlikely to hurt the global economy
During a call with reporters Thursday morning, Ross said Canada's and Mexico's exemptions were linked to the progress of the NAFTA negotiations, which "are taking longer than we had hoped."
Mexico, EU to retaliate
Mexico responded swiftly with tariffs of its own on U.S. exports of pork bellies, grapes, apples and flat steel, the Associated Press reported.
The EU also announced it would launch a dispute settlement case at the WTO and impose "rebalancing measures."
"Today is a bad day for world trade. We did everything to avoid this outcome," said EU Commissioner for Trade Cecilia Malmström.
"The U.S. has sought to use the threat of trade restrictions as leverage to obtain concessions from the EU. This is not the way we do business."
Ross tried to deflect suggestions the tariffs would damage ongoing NAFTA talks and the upcoming G7 meetings in Quebec.
"If any of these parties does retaliate, that does not mean that there cannot be continuing negotiations," Ross said.
"They're not mutually exclusive behaviours."
He did allow some leeway, saying the U.S. could be flexible.
"We continue to be quite willing, and indeed eager, to have further discussions," Ross said.
Security reasoning questioned
Conservative MP Erin O'Toole said Canada should be treated differently than the EU when it comes to security.
"Very disappointed that despite Canada being the most closely integrated security partner for the United States, Trudeau was unable to secure a deal to treat our industries and our workers fairly," he said.
Canada's procurement minister cast doubt on the U.S.'s national security justification.
"It is very difficult to fathom that there would be a security risk imposed by Canada on the United States," said Public Services and Procurement Minister Carla Qualtrough, She was in Ottawa attending Cansec, Canada's largest annual arms show.
She said the federal government has "contingency plans" in place to absorb the impact of U.S. tariffs on steel and aluminum on defence projects.
Multi-billion-dollar programs to buy new fighter jets and warships are all heavily dependent on the price of steel.
"We prepare for this kind of thing," said the Delta MP. "There is money set aside, whether it be for tariffs or for interest rate fluctuations, so we can proceed with our defence procurement should there be additional costs associated because of tariffs or other unexpected circumstances."
'Not the action of a friend'
On Wednesday, Trudeau called Ontario Premier Kathleen Wynne, Quebec Premier Philippe Couillard and Saskatchewan Premier Scott Moe, all in regions with large steel and aluminum sectors, 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."
Wynne called Trump a "bully" and urged the federal government to push back.
"We need to hit Trump where it hurts — in his wallet," the premier — currently fighting to keep her job in Ontario's provincial election — said Thursday. "This short-sighted decision is an attack on Ontario's steel industry and its workers. It is not the action of a friend, an ally or economic partner."
She also called on her provincial political rivals to come together to speak with one voice.
Couillard, whose province is the country's largest producer of aluminum, called the tariffs "illogical."
"It's a bad decision for the Americans. They're increasing manufacturing and defence industry costs," he said in French.
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
Canada's attempt to thwart the tariffs came in concert with its European allies, who were also trying to stop the U.S.
Both Trudeau and French President Emmanuel Macron made their cases separately to the U.S administration, while other European officials met with their U.S. counterparts in Paris on Thursday.
With files from the CBC's Katie Simpson, Murray Brewster and The Associated Press
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