Canada mixes pride with retaliatory tariffs
OTTAWA, Ontario — This year on Canada Day, Prime Minister Justin Trudeau visited a former Heinz ketchup plant in Ontario and met steelworkers in Saskatchewan.
It was a schedule rich with the symbolism of the moment: Sunday was also the day Canada retaliated against the Trump administration’s tariffs on Canadian steel and aluminum with import duties on $12.6 billion of U.S. products, from ballpoint pens to industrial pipes. The workers Trudeau visited will be in the middle of this fast-escalating trade war.
The White House’s use of a national security argument to justify the duties against a close ally, along with President Donald Trump’s repeated belittling of Trudeau and his trade policies, has offended and angered Canadians. On social media, they are calling for boycotts of U.S. products and encouraging one another to look elsewhere for vacation destinations. Trudeau’s decision to retaliate won a rare endorsement from all three of Canada’s major political parties.
“We’re living in a brand-new world,” said Debra Steger, a law professor at the University of Ottawa who is a former senior trade negotiator for Canada and a onetime official at the World Trade Organization. “It has been pretty messy, and it’s not going to get better soon. We really are in a very difficult time.”
The Canadian government said in a statement Friday that it had reached out to Robert Lighthizer, the U.S. trade representative, six times this past week in a final bid to resolve the tariff dispute. On Friday, Trudeau also spoke with the president about Canada’s decision to retaliate. Those efforts, as well as Trudeau’s earlier attempts to win over Trump and his advisers, proved unproductive.
With the Canada Day tariff, the country joins China, Europe and Mexico, among others, in retaliating against U.S. duties. Early this year, Canada also filed a sweeping complaint at the World Trade Organization about the Trump administration’s “America First” approach.
Adding to concerns about escalation, Trudeau and his officials have vowed further action if the White House follows through with threatened duties on Canadian-made autos and auto parts, the keystone of Canadian manufacturing, which have been covered by various trade agreements with the United States for more than 50 years. Similarly, Lighthizer vowed Tuesday to “take all necessary actions” against countries retaliating against U.S. trade actions.
Like many in Canada, Trudeau seems at a loss when it comes to Trump’s motive for turning the largest U.S. trading partner into a target.
“I’m not in a position to opine on motivations of the president,” he said at a recent news conference. “I’m going to stay focused on the relationship that we’re building, on defending Canada’s interests, on looking for ways to further push the benefits of improving and modernizing NAFTA.”
The prime minister attended a party outside the former Heinz plant in Leamington, Ontario, the self-proclaimed tomato capital of Canada. After Heinz said it would close the plant in 2013 and shift most of its production to the U.S., the factory was revived by a former Heinz employee.
Now known as Highbury Canco, it is a contract manufacturer for Heinz and several other food companies. Tomato paste from the plant is used by French’s to make ketchup that the company promotes as a Canadian alternative to the imported Heinz condiment, which is one of Canada’s retaliation targets. Its 560 employees also make tomato sauces for several companies that will benefit from Trudeau’s tariffs.
But the plant’s savior, Sam Diab, who is chief executive of Highbury Canco, said the trade battle was not all good news. The new Canadian tariffs will also affect the price of steel cans, bottle caps and jar lids he imports from the United States and for which there is no viable alternative source in Canada.
More worrying, Diab said, are the broader implications for the company, which also exports to the United States.
“I don’t think it’s an environment anybody really likes, the uncertainty,” he said. “We’ve operated and succeeded in a freetrade environment, and in a closed market we could probably adapt. It’s this in-between situation — that’s the problem.”