After U.S. President Donald Trump announced a proposal to slap hefty tariffs on steel and aluminum imports, Finance Minister Bill Morneau says Canada is ready to retaliate if necessary.
“Canada is an integral part of the supply chain on steel and aluminum in North America,” Morneau told CTV Question Period host Evan Solomon.
“We clearly have said that this is important to maintain the ability for us to trade back and forth… And obviously we’re going to be firm. We’re going to say that this is not an acceptable possibility for us to put tariffs on an important commodity like steel and aluminum.”
Trump announced the proposed tariffs on Thursday, outlining a 25 per cent tariff on imported steel and a 10 per cent tariff on imported aluminum. Canada is the top supplier of both metals to the U.S., with $15 billion a year in combined sales.
Morneau said the Liberal government’s first approach is to make its position on the issue known. If that fails to sway the Trump administration, Morneau added, “We’ve clearly said that we’re prepared to react.”
“I spoke to Treasury Secretary (Steven) Mnuchin this week to give him our point of view,” Morneau explained. “He clearly understood. So we’re going to keep working to make sure that all of the people that are involved in this decision get to what we hope will be the right answer.”
Morneau offered no specifics regarding potential retaliatory trade measures. He also rejected the U.S. government’s national security rationale for imposing tariffs, saying that they would “harm” both Americans and American businesses.
“We’re going to remind them that we don’t think a trade war is in anyone’s best interests, and we don’t want to be forced to react, but of course we will if we have to,” he added. “We’re working to make sure we get to the right conclusion, which is to exempt Canada from this action.”
Scheer cautions against retaliation
Conservative leader Andrew Scheer criticized the Liberal government for including nothing in their recent budget to buffer the effects of a potential trade war.
“We have a lot of difficulties right now with our trading partner and I believe that this government should be doing more,” Scheer told CTV’s Question Period.
“We just saw in the budget not a single paragraph or fund or any type of signal that there would be a contingency plan if NAFTA goes off the rails or if these other trade irritants come along.”
The 2018 budget, Scheer added, “failed to treat these types of trade issues seriously” and included nothing to make Canada “a more attractive place to invest.”
Such measures, he said, could have come in the form of lower tax rates or regulatory reductions.
Scheer also said that he would have liked to see the government conduct more outreach to American companies that rely on Canadian trade in order to put pressure on the U.S. administration.
“If investors around the world and within the United States don’t see Canada as a place where they’re fighting to get into, then we have fewer voices in the United States putting pressure on the administration to keep that border open,” he explained.
Scheer also cautioned against imposing retaliatory measures in the wake of potential steel and aluminum tariffs.
“We have to understand that any escalation in a trade fight also hurts our own economy,” he said. “So, as we slap tariffs on things that we import in from the U.S., that raises costs and damages our economy, so we have to be very careful. That’s not the preferred option.”
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