Canada will impose retaliatory duties against US

Ann Santiago
July 2, 2018

Canada announced Friday, June 29, billions of dollars in retaliatory tariffs against the response to the Trump administration's duties on Canadian steel and aluminum, saying Friday it won't back down.

Foreign Affairs Minister Chrystia Freeland, Employment Minister Patty Hajdu and Industry Minister Navdeep Bains will make the announcement during a visit to the Stelco plant in Hamilton, Ont.

U.S. President Donald Trump imposed tariffs on Canadian steel and aluminum last month, citing national security reasons. It reached new depths at the recent G7 summit when Trump abruptly rejected the joint statement and insulted his Canadian host, Prime Minister Justin Trudeau.

"We support the federal government's counter-tariffs as a retaliation to the American bullying tactics".

The tariffs are set to take effect July 1.

On Friday, the federal government announced reciprocal tariffs on steel and aluminum imports, as well as duties on a wide range of products, including playing cards, ballpoint pens and sleeping bags.

Trudeau and U.S. President Donald Trump spoke late Friday. "We look forward to working closely with the government to implement further supports for workers as needed", said Yussuff.

The taxes on items including ketchup, lawn mowers and motor boats amount to $12.6 billion.

"We will not escalate and we will not back down", she said, while noting that this trade action was the strongest Ottawa has taken since World War II.

Ms. Freeland said such a move would be "absolutely absurd".

The direct economic impact from the US metal tariffs and Canada's retaliation - either in terms of economic activity or inflation - are expected to be small.

For example, Canada imports yoghurt worth just $US3 million from the U.S. annually, with most of it coming from a plant in Wisconsin, the home state of House Speaker Paul Ryan. Jean-Francois Perrault, chief economist at Scotiabank, expects a "maximum" 0.1 percentage point hit to growth, and less than a 10th of a percent on inflation.

Whiskey is another item on the list, which comes from Tennessee and Kentucky, the latter being the home state of Republican Senate leader Mitch McConnell.

Freeland also said they are prepared if Trump escalates the trade war.

"Our sense is that the impact on the economy will be small, but could be substantial for the steel industry over time", said Perrault, adding the outcome of Nafta negotiations remains the central question on trade for Canada.

Potential tariffs of 20 percent on autos have also been threatened by the president.

The source, who declined to be identified because of the sensitivity of the situation, said Freeland will announce the aid and reveal a list of US goods that Canada intends to subject to retaliatory tariffs.

Canadians are particularly anxious about auto tariffs because the industry is critical to Canada's economy.

"The real solution to this unfortunate and unprecedented dispute", she said, "is for the United States to rescind its tariffs on our steel and aluminum". Trump's tariffs will be damaging to workers on both sides of the border.

Freeland said an "intensive phase" of NAFTA renegotiations will resume quickly after Sunday's elections in Mexico.

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