Canada Retaliates With Over $2 Billion Tariffs on US Goods

Deputy Prime Minister Chrystia Freeland told a news conference the countermeasures would be put in place by Sept. 16 to allow consultations with industry.

The move marks the latest ruction in a choppy relationship between the neighbors and close allies since President Donald Trump took office in 2017.

Deputy PM Of Canada Speaks

Canada said Friday it will slap retaliatory tariffs on $2.7 billion worth of U.S. goods, the latest development in a new trade feud sparked by President Donald Trump’s decision to reimpose aluminum duties on the U.S. ally.

“Canada will respond swiftly and strongly,” Canadian Deputy Prime Minister Chrystia Freeland said at a news conference.

“We will impose dollar-for-dollar countermeasures in a balanced and perfectly reciprocal retaliation,” she said. “We will not escalate and we will not back down.”

In imposing these tariffs, the United States has taken the absurd decision to harm its own people at a time when its economy is suffering the deepest crisis since the Great Depression,” Freeland said.

“These tariffs are unnecessary, unwarranted and entirely unacceptable,” she added. “They should not be imposed. Let me be clear: Canadian aluminum is in no way a threat to U.S. national security, which remains the ostensible reason for these tariffs, and that is a ludicrous notion.”

Freeland also noted that the new tariffs come just over a month after the United States-Mexico-Canada Agreement – the Trump-backed trade pact that replaced the North American Free Trade Agreement, or NAFTA – went into effect.

“Now is the time to advance North American economic competitiveness, not to hinder it,” she said.

Freeland said Prime Minister Justin Trudeau will spend the next 30 days consulting with Canadian citizens and businesses on a broad list of aluminum-containing products. Canada’s new duties on U.S. imports, she said, will total 3.6 billion Canadian dollars ($2.7 billion).

Why’s This Happening?

Trump, during a speech Thursday at a Whirlpool manufacturing plant in Ohio, announced that he had signed a proclamation reimposing 10% tariffs on aluminum imports from Canada that had been lifted more than a year earlier. The president complained that Canada was putting American workers in the aluminum industry at a disadvantage.

“The aluminum business was being decimated by Canada,” he said.

Trudeau vowed to enact countermeasures against the U.S. just hours after Trump’s announcement.

The text of Trump’s proclamation says that Commerce Secretary Wilbur Ross informed Trump that Canadian aluminum imports “increased substantially” in the months after the decision to lift the tariffs in mid-2019.

That so-called surge “threatens to harm domestic aluminum production and capacity utilization,” the proclamation said.

Freeland on Friday lambasted that assertion, arguing that the tariffs will hurt American consumers already suffering from the economic devastation inflicted by the coronavirus pandemic.

Ontario Premier Doug Ford and Economic Development Minister Vic Fedeli issued a joint statement

The statement says that the province does about $360 billion in two-way trade with the U.S. every year.

“We are disappointed that the U.S. has re-imposed tariffs on imports of aluminum products from Canada, particularly at a time when our trade partnership will be essential to our economic recovery,” the statement says.

“Last year, Ontario purchased $2.3 billion CAD in aluminum products from the U.S. alone, supporting hundreds of American jobs and businesses. As one of the U.S.’ top customers, these tariffs hurt the mutual prosperity and security that has benefitted our two nations for centuries.”

The Ontario government also threw their support behind the federal government, who has since said they intent to impose “dollar-for-dollar countermeasures” in retaliation to the tariffs. The premier and economic development minister went on to say that Trump’s announcement undermined “the benefits of the highly integrated U.S.-Ontario trading relationship” outlined in the new Canada-United States-Mexico Agreement.

“We urge (the federal government) to press the U.S. administration for immediate and permanent removal of its tariffs on Canadian aluminum, and to ensure that no other trade impediments such as quotas are introduced,” the statement reads.

Strengthening our unique trading partnership will only ensure that everyday consumers, workers and businesses can emerge from this period of economic uncertainty in a position of strength.”

This isn’t the first time Ford has called out the United States government for imposing tariffs on Canadian goods.

Goods Involved And Previous Conflicts

The Canadian list of goods that might be subject to tariffs includes aluminum bars, plates, refrigerators, bicycles, washing machines and golf clubs. Trump is a keen golfer.

“At a time when we are fighting a global pandemic… a trade dispute is the last thing anyone needs – it will only hurt the economic recovery on both sides of the border. However, this is what the U.S. administration has chosen to do,” said Freeland.

“I think the very best outcome would be for the United States to reconsider,” said Freeland, adding that she was confident common sense would prevail.

The list of goods subject to tariffs is narrower than the last time Ottawa struck back at Trump because the two sides agreed in 2019 to limit the scope of retaliation in disputes over steel and aluminum, said a Canadian government source who requested anonymity. (source: Reuters)

In 2018, Ottawa slapped tariffs on C$16.6 billion ($12.5 billion) worth of goods ranging from bourbon to ketchup after Washington imposed sanctions on Canadian aluminum and steel.