Deputy Prime Minister Chrystia Freeland speaks during a press conference in Toronto on Aug. 7, 2020.The Canadian Press
The federal government will impose retaliatory measures valued at $3.6-billion on the United States in response to new tariffs on Canadian aluminum that President Donald Trump announced this week.
Deputy Prime Minister Chrystia Freeland said the retaliatory tariffs will take effect in 30 days, after Ottawa consults Canadians on what to target.
Canada is releasing a list of possible products, many of which include aluminum, such as washing machines, refrigerators and golf clubs. Canadians will have until Sept. 6 to send comments to the finance department.
After Canada has chosen the targets, the tariffs will go into effect on Sept. 16.
“A trade dispute is the last thing anyone needs,” Ms. Freeland said. “It will only hurt an economic recovery on both sides of the border. However, this is what the U.S. administration has chosen to do.”
Ontario Premier Doug Ford said on Friday that he understands that the Americans are also planning tariffs on Canadian steel. Ms. Freeland declined to directly comment on this, but didn’t rule it out.
“I have long believed that with this administration, the best Canadian policy is hope for the best and prepare for the worst.”
She blamed Mr. Trump for this decline in Canada-U.S. relations.
“This administration is the most protectionist administration in U.S. history,” Ms. Freeland said.
The U.S. tariffs take effect on Aug. 16 and apply to raw aluminum, which the White House says accounted for 59 per cent of Canadian exports of the metal to the U.S. over the past year. Mr. Trump is imposing them under Section 232 of the Trade Expansion Act, which allows the President to use tariffs for “national security” purposes. Mr. Trump has frequently used Section 232 to circumvent international trade rules, such as those of the U.S.-Mexico-Canada Agreement and the World Trade Organization.
“The final tariffs that we impose will be, as I said, perfectly reciprocal, dollar for dollar, and the total amount will be $3.6-billion,” Ms. Freeland said.
The new trade battle is erupting during a difficult presidential re-election campaign for Mr. Trump.
Ms. Freeland said the possible targets were chosen because they would inflict “minimal damage on Canada with strongest possible impact on the United States. We do hope when Americans look at this list, they will understand why having a tariff dispute is a really bad idea.”
The idea that Canadian aluminum is a threat to U.S. national security ludicrous, she added.
Mr. Ford said Mr. Trump would not stop at aluminum tariffs.
“There’s 40 categories of steel they’re going to go and tack on a certain percentage,” he said.
Mr. Ford said he spoke with Robert Lighthizer, Mr. Trump’s trade chief, about the aluminum tariffs in recent days. However, he did not specify who told him to expect steel tariffs.
Two industry sources with knowledge of confidential trade discussions between the U.S. and Canada said there had been some cursory talk of new steel tariffs. But the sources said it has not gone far. Unlike aluminum smelters, which raised Mr. Trump’s ire by pumping out raw aluminum to make up for the pandemic-induced fall in demand for more specific metal products, steel producers reduced production, the sources said, leaving the President no reason to target them.
The Globe and Mail is not identifying the sources because they were not authorized to speak publicly about the confidential discussions.
Mr. Ford urged consumers to buy locally made goods, and retailers and manufacturers to put “made-in-Ontario” and “made-in-Canada” stickers on products.
The Premier also expressed disappointment with Mr. Trump.
“In times like these, who tries to go after your closest ally, your closest trading partner, your No. 1 customer in the entire world? Well, President Trump did this,” he said. “He comes and backstabs us like this.”
Mr. Ford said he delivered this message to Mr. Lighthizer. “We will come back swinging like they’ve never seen before,” the Premier said he told the trade chief.
The Premier has previously expressed admiration for Mr. Trump, and supported him during the 2016 election campaign.
Earlier this week, at a washing-machine factory in Ohio, Mr. Trump accused industry north of the border of trying to “kill all our aluminum jobs” with a “flood” of exports.
The United States produces about a third of the aluminum necessary to meet its demand. This means U.S. businesses and consumers will have to pay the tariff or find other foreign sources, such as Russia.
Canadian aluminum sales to the United States totalled US$8.4-billion in 2017, the last full year without tariffs, accounting for 80 per cent of Canada’s exports of the metal.
The President imposed tariffs on Canadian aluminum and steel in 2018.
Two U.S. companies have lobbied Mr. Trump to reimpose tariffs, arguing that aluminum imports from Canada have surged since they were lifted. But Canadian metals producers, as well as most of the U.S. industry, say overall imports from Canada are comparable to their levels before the tariffs.
There is significant opposition to the Trump tariffs from U.S. business.
U.S. Chamber of Commerce executive vice-president Myron Brilliant called the aluminum tariffs “a step in the wrong direction” in a statement this week.
“These tariffs will raise costs for American manufacturers, are opposed by most U.S. aluminum producers, and will draw retaliation against U.S. exports — just as they did before. We urge the administration to reconsider this move.”
Senior Republican Senator Chuck Grassley said on Twitter that using a section of trade law meant for threats to national security to enact the tariffs “is ridiculous [because] beer cans are not defense weapons.”
In talks between the two countries in recent weeks, Mr. Lighthizer demanded Canada agree to aluminum-export quotas to avoid renewed tariffs, The Globe reported earlier this week, but Ottawa refused to accept quotas.
With a report from Laura Stone at Queen’s Park
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