Canada could be entitled to US$3.2B in tariff retaliation

tariffs of 25 per cent on steel and 10 per cent on aluminum, arguing the imports posed a threat to national security. Rules established by the WTO would permit a country to retaliate if there is a legal finding that this rationale is baseless.

“The compensation — or retaliation — limit has historically been set at the value of an exporting country’s lost trade,” Bown writes.

It follows that Canada, as the nation most injured, would be entitled to the largest retaliation at US$3.2 billion, he added.

How would it work? First, the U.S. would have to impose the levies. Then Canada would have to challenge the country’s claim that the tariffs are justifiable under the “national security exception”

Once the amount of lost trade is established, Canada would have discretion to draw up a list of which U.S. products to target. These items can be selected according to economic or political motives. For instance, if Trump goes ahead with the tariffs, the EU has said it will respond with levies on Harley-Davidson motorcycles, Kentucky bourbon and Levi’s blue jeans — products manufactured in the home states of key Republican leaders including Senate Majority Leader Mitch McConnell and House Speaker Paul D. Ryan.

“If you think hitting Paul Ryan would be a way to get Trump to remove the tariffs, maybe pick products from his district in Wisconsin, that’s the idea,” Bown said in an interview.

Authorized retaliations are rare — the WTO has established them in fewer than 15 disputes since 1995. But Canada was authorized a couple of years ago to retaliate to a limit of US$1 billion against the U.S. in a case involving regulations on rulesof-origin labelling on beef. But the U.S. dropped the regulations before the retaliation ever took place.

“Sometimes the retaliation is implemented, but more often the authorization triggers the reform,” Bown said. “It’s how the process usually works out.” CN interim CEO JeanJacques Ruest said in a statement Wednesday.

He took over from Luc Jobin, fired as president and CEO just two days earlier.

Farmers have said shipper delays are a recurring problem in Western Canada, particularly in years of high production.

“It just feels like every time grain gets left in the dust,” Daryl Fransoo, director of the Western Canadian Growers Association and owner of a 5,000-acre farm near Glaylyn Sask., said in a phone interview Tuesday. “Everything else gets prioritized.”

The last major snag in grain shipments, in 2013-14, cost the economy an estimated $8 billion in foregone revenues.