Canada finalizes tariffs on United States goods

Hugh Fox
July 1, 2018

Last month, the United States government announced tariffs of 25 per cent on Canadian steel and 10 per cent on Canadian aluminum effective June 1 after the Trump administration removed an exemption sparing Canada, along with the European Union, from global measures announced earlier this year.

Foreign Affairs Minister Chrystia Freeland will visit Hamilton on Friday to reveal the details of the federal government's plan to support Canada's tariff-targeted steel and aluminum industries. Some items will be subject to taxes of 10% or 25% amounting to $16.6 billion (Rs 1 lakh 13,600 crore) in tariffs.

The final list of goods will hit a number of steel products with 25% tariffs, aluminium products with 10% tariffs and a range of other USA goods, including ketchup, pizza, boats and whiskey - also with 10% tariffs.

Canada also happens to buy more American steel than any country in the world, accounting for half of USA exports of the product.

Trump has threatened to impose significant new tariffs on auto parts and cars if Canada implements the retaliatory tariffs.

Prime Minister Justin Trudeau apparently reiterated that position to the president himself in a phone call on Friday.

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"We will not escalate, and we will not back down", Freeland told reporters at a steel mill in Hamilton, Ontario. "We are also concerned about further escalation and potentially wider and deeper impacts on Canadian businesses", the chamber said in its submission to the federal government, which it released publicly this week. "This is a perfectly reciprocal action".

Freeland said she had already spoken to U.S. Trade Representative Robert Lighthizer six times this week and was prepared to meet at any time to tackle the issue. At the time, he lamented what he framed as a necessity to strike back at Canada's largest trading partner, and called the US tariffs "an affront" to a country whose soldiers have fought and died alongside Americans.

But she said the move was made with "regret" and "very much in sorrow, not in anger" against a close ally. "It would change the calculus", he said.

The retaliation came as General Motors Co warned that any tariffs Washington might impose on imported vehicles could cost USA jobs, and as Treasury Secretary Steve Mnuchin denied a report that President Donald Trump wanted to withdraw from the World Trade Organization.

"I think that prediction has been borne out and I think all of us anticipate there will be some moments of drama in the future".

"Official U.S. government statistics show that the in a small surplus with Canada", says Gordon Ritchie, who served as Canada's ambassador for trade negotiations in the 1980s.

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"The steel and aluminum industries are vital suppliers to the Canadian manufacturing, energy, automotive and construction sectors".

Several countries, including Canada, are challenging that rationale with complaints against the U.S. to the World Trade Organisation (WTO).

Bilous acknowledged that both sides get hurt by tariffs but said countermeasures are a necessary step.

In a separate filing, Toyota Motor Corp said imposing tariffs on the auto industry imports would "threaten United States manufacturing, jobs, exports, and economic prosperity".

Freeland said an "intensive phase" of NAFTA renegotiations will resume quickly after Sunday's elections in Mexico.

The Canadian government also announced $1.5 billion in subsidies for Canada's steel and aluminum industries. "Candidly, the Canadian retaliation is a drop in the bucket compared to the retaliation that we're going to see from China and elsewhere".

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But we have young players who are talented and have the potential to go forward. "We need to draw the right conclusions". Sweden and Mexico confirmed their second round berth collecting six points each from their respective three matches.

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