Blog : Canada considers retaliation 'sweet spot' as U.S. moves to impose metal tariffs

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5/31/2018 11:24 am

Canada considers retaliation 'sweet spot' as U.S. moves to impose metal tariffs

Tariffs amounting to 25% on imported steel and 10% on aluminum announced by Commerce Secretary Wilbur Ross.

Mexico, EU to retaliate

Mexico swiftly responded with tariffs of its own on pork bellies, grapes, apples and flat steel, The Associated Press reported.

The EU also announced it would trigger a dispute settlement case at the WTO and impose "rebalancing measures."

"Today is a bad day for world trade. We did everything to avoid this outcome," said EU Commissioner for Trade Cecilia Malmström.

"The U.S. has sought to use the threat of trade restrictions as leverage to obtain concessions from the EU. This is not the way we do business."

Ross tried to deflect suggestions the tariffs would damage ongoing NAFTA talks and the upcoming G7 meetings in Quebec.

"If any of these parties does retaliate, that does not mean that there cannot be continuing negotiations," Ross said.

"They're not mutually exclusive behaviours."

He did allow some leeway, saying the U.S. could be flexible.

"We continue to be quite willing and indeed eager to have further discussions," Ross said.

Security reasoning questioned

Conservative MP Erin O'Toole said Canada should be treated differently than the EU when it comes to security.
"Very disappointed that despite Canada being the most closely integrated security partner for the United States, Trudeau was unable to secure a deal to treat our industries and our workers fairly," he said.

Canada's procurement minister cast doubt on the U.S.'s national security justification.

"It is very difficult to fathom that there would be a security risk imposed by Canada on the United States," said Public Services and Procurement Minister Carla Qualtrough while attending Cansec, Canada's largest annual arms show, in Ottawa.

She said the federal government has "contingency plans" in place to absorb the impact of potential U.S. tariffs on steel and aluminum on defence projects.

Multi-billion dollar programs to buy new fighter jets and warships are all heavily dependent on the price of steel.

"We prepare for this kind of thing," said the Delta MP. "There is money set aside, whether it be for tariffs or for interest rate fluctuations, so we can proceed with our defence procurement should there be additional costs associated because of tariffs or other unexpected circumstances."

'Not the action of a friend'

Trudeau called Wynne, Quebec Premier Philippe Couillard and Saskatchewan Premier Scott Moe, all in regions with large steel and aluminum sectors, on Wednesday to talk about the upcoming decision.

The Prime Minister's Office said they "all agreed to continue to defend the Canadian steel and aluminum industry from unwarranted tariffs and to stand up for the best interests of all Canadian workers and businesses."

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Couillard, whose province is the largest producer of aluminum, called the tariffs "illogical."

"It's a bad decision for the Americans. They're increasing manufacturing and defence industry costs," he said in French.

Finance Minister Bill Morneau announced late Wednesday that the government would bolster its measures to prevent foreign steel and aluminum from being dumped into the North American market, but it appears to have done little to prevent the U.S.'s punitive duties

Canada's attempt to thwart the tariffs came in concert with its European allies, who were also trying to stop the U.S.
Both Trudeau and French President Emmanuel Macron made their cases separately to the U.S administration, while other European officials met with their U.S. counterparts in Paris on Thursday.

Photo: Canada Prime Minister Justin Trudeau