Canada slaps $16.6 billion in tariffs on U.S. goods
OTTAWA— The federal government is unleashing a Canada Day trade barrage on the United States, moving ahead with $16.6 billion in tariffs that will hit American products, from steel and aluminum to maple syrup and orange juice.
With Hamilton’s Stelco steel mill as a symbolic backdrop, federal cabinet ministers on Friday unveiled details of Canada’s retaliatory trade measures and laid out $2 billion in promised aid to assist Canadian companies and workers caught in the cross-border trade spat.
The tariff counterpunch — Canada’s response to the U.S. decision to impose tariffs of 25 per cent and 10 per cent, respectively, on steel and aluminum imports from Canada — was first revealed in May, but federal officials delayed their implementation until July 1 to get feedback from Canadian companies.
Foreign Affairs Minister Chrystia Freeland says the “measured, perfectly reciprocal” actions are in line with similar moves by the European Union and Mexico that are in response to the tariffs imposed by the U.S. in May.
“We will not escalate, and we will not back down,” she said.
Friday’s countermeasures slap tariffs of 25 per cent on a host of steel and aluminum products and 10 per cent on goods including pizza, quiche, whiskies, toilet paper and inflatable boats.
“It is a reciprocal action ... It is a dollar-for-dollar response,” Freeland said.
“We are perfectly within our rights to respond.”
Navdeep Bains, the federal minister of innovation, science and economic development, and Patty Hajdu, the minister of employment, workforce development and labour, were also present for the announcement in what was designed as a show of support for Canadian industries.
“We have your back,” Bains told the gathering that included mill workers, as he detailed federal assistance meant to minimize job losses.
Those measures include: extending employment insurance work-sharing agreements by 38 weeks to avoid layoffs; more funding for worker training programs; up to $250 million to improve the competitiveness of Canadian manufacturers; and $50 million over five years to help companies diversify their markets and take advantage of new trade agreements with Europe and Pacific region countries.
Hajdu said that government will continue to assess the economic fallout and whether more assistance is needed.
Prime Minister Justin Trudeau’s own Canada Day celebrations will, in part, underscore the support for Canadian workers. He will visit a Canadian ketchup manufacturer in Leamington, Ont., then jet off to see steel workers in Regina, Sask., before ending his day in Dawson City, Yukon.
Canadian Steel Producers Association president Joseph Galimberti was among the industry leaders to welcome the government’s retaliation and aid package. At the same time, Galimberti bemoaned the situation that gave rise to it.
“We’d like to go back to a place where there are no tariffs on North American steel at all,” he said.
Attention now turns to the White House and whether U.S. President Donald Trump reacts with yet more tariffs as punishment for the Canadian action.
Trump had lashed out at Trudeau in the wake of the G7 summit for saying that Canada won’t be pushed around by its southern neighbour. He called Trudeau “weak” and “dishonest,” and claimed on Twitter that the steel and aluminum tariffs were imposed because of Canada’s tariffs on dairy imports.
The U.S. president vowed to punish “the people of Canada” economically because of Trudeau’s comments.
Asked if she fears retaliatory trade actions by the U.S., Free- land says it was Washington’s “illegal” tariffs that prompted Canada’s moves in the first place.
She also sought to downplay a U.S. threat to slap tariffs on automobiles, calling it “absurd” that cars with many U.S. parts could pose a national security threat — the rationale that Trump used to justify tariffs on steel and aluminum.
Still, the foreign affairs minister conceded that Ottawa is making contingency plans. “All of us at this point fully anticipate there will be moments of drama in the future,” Freeland said.
“We’re ready, really, for pretty much anything,” Freeland concluded, suggesting plans are being drawn up in the event that the U.S. imposes more tariffs.
Trudeau announced Canada’s intention to retaliate against Trump’s tariffs at the end of May, calling them “an affront” to a country whose soldiers have fought and died alongside Americans.
Freeland said the Canadian tariffs will remain in place until the U.S. rescinds its own surtaxes on Canadian steel and aluminum.
Dan Ujczo, a trade lawyer at Dickinson Wright in the U.S., said negotiations on the North American Free Trade Agreement offer the best hope of eliminating the tariffs and warding off the U.S. threat of tariffs on autos.
“It places a premium on the NAFTA parties getting to the negotiating table as fast as they can … That’s ultimately where this will be resolved,” he said.
“This isn’t going to be resolved by tariffs, retaliation and then further escalation,” Ujczo said.
Those talks are on hold until after Sunday’s elections in Mexico, which could produce a new president for the country. Freeland said that she expects negotiations to pick up rapidly once a new Mexican government is in place.
Despite the trade actions, Freeland tried to underscore the government’s ongoing relations with the U.S. administration, saying she had spoken repeatedly with U.S. Trade Representative Robert Lighthizer over the past week, as well as with Kelly Craft, the U.S. ambassador to Canada.
“I am absolutely confident that common sense will prevail … I think economic reality is a very powerful thing,” she said.
Freeland also played down any hints of controversy over an upcoming White House visit by former prime minister Stephen Harper.
“He is a person we will need to respect as the former prime minister … we wish him well in all of his endeavours,” she said.
“We are perfectly within our rights to respond.” CHRYSTIA FREELAND FOREIGN AFFAIRS MINISTER