Canada beefs up anti-dumping measures ahead of United States decision on duties

Saul Bowman
June 4, 2018

"Any government that embarks on a protectionist path inflicts the most damage on itself".

G7 finance ministers and central bankers crafted a message to Washington Saturday at the end of a three-day meeting in Whistler, B.C. The gathering, meant to explore economic issues ahead of the leaders' summit, featured discussions on trade that one minister described as "tense and tough". "Nothing", French President Emmanuel Macron said in an impassioned speech at the Organization for Economic Cooperation and Development in Paris.

Tariffs of 25 percent on steel and 10 percent on aluminum imports from Canada, Mexico and the European Union will take effect at midnight tonight. Stock prices slumped amid fears of a trade war, with the Dow Jones industrial average falling almost 252 points, or 1 percent, to 24,415.84.

While not confirming directly that the US would decide to impose tariffs, he said: "It's up to the European Union to decide if it wants to take retaliatory measures".

The 25% tariff on steel will impact half a billion dollars worth of trade between the United Kingdom and the U.S., hitting steelworks such as Dalzell in Scotland.

Mexico announced what it described as "equivalent" measures on a wide range of US farm and industrial products.

"That Canada could be considered a national security threat to the United States in inconceivable".

The steel and aluminum tariffs could also complicate the administration's efforts to renegotiate NAFTA, a pact that Trump has condemned as a job-killing "disaster". The European Union and Canada have both pledged to retaliate.

All six of the other G7 countries are paying the tariffs, which are largely aimed at curbing excess production in China.

The EU is preparing to slap tariffs on United States products, including bourbon, motorcycles, and blue jeans, worth up to 2.8 billion euros ($3.3 billion).

The tariffs, set to take effect at midnight, happened to coincide with the Cansec trade show, in which numerous world's largest defence companies descend on Ottawa each year to pitch their wares to government.

The tariffs take effect on July 1 and will last until the U.S. ends its move.

The European Union is also planning a tariff counter strike and filed a request on Friday for consultations with the World Trade Organisation.

The world's two biggest economies have threatened to impose tariffs on up to $200 billion worth of each other's products.

Europe hit back at the USA after President Donald Trump slapped tough tariffs on European steel and aluminium earlier this week.

"The US measures are a protectionist intervention in worldwide trade and run counter to the principles of the World Trade Organization", the body said in a statement, сalling for a swift WTO decision on challenges to the tariffs. A handful of other United States of America trading partners, including South Korea, Australia, Argentina and Brazil, previously won permanent exemptions by agreeing to quotas on their exports. But the NAFTA talks stalled.

Mnuchin rejected comments from some G7 officials that the United States was circumventing worldwide trade rules with the tariffs or ceding global economic leadership.

The prospect of a global trade has roiled financial markets this week, too, even if they were back in positive territory on Friday. But the two sides could not reach an agreement.

The new 25-percent tariff on steel imports and 10-percent tariff on aluminum came into force at midnight (4:00am GMT) on Friday. "Consumers are known to be a very heterogeneous group and they don't really act as a powerful body in saying we are not going to pay these tariffs".

"Those people that work in metal-producing and steel mills will benefit, but those that work in steel-using industries when the prices go up, are going to be hurt".

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