Canada plotting $3.6B retaliation over Trump's tariffs
OTTAWA -- Deputy Prime Minister Chrystia Freeland has started detailing Canada’s plans to hit back with $3.6 billion in countermeasures on a “broad and extensive list” of aluminum products in response to U.S. President Donald Trump imposing a new tariff on Canadian aluminum.
Freeland announced on Friday that over the next 30 days the federal government will consult industry on a long list of American products that they are looking to level, in what will be a dollar-for-dollar response.
Among the list of potential U.S. aluminum products Canada will be slapping 10 per cent tariffs on are:
- Aluminum beverage cans;
- Household items such as tinfoil, pots and scouring pads;
- Construction material such as nails, tacks, staples and screws;
- Appliances such as refrigerators and washing machines; and
- Recreational items like bicycles, golf clubs, playground equipment and tripods.
Freeland said that while not all items on that list will end up on the final roster, Canadians have until Sept. 6 to submit their feedback to inform the final list.
Canadian officials had indications that this move was coming, and preparations have been underway for at least a month. Freeland said the “perfectly reciprocal” tariffs will take the exact same approach as the federal government took in 2018.
“Our objective here, exactly as it was the last time, is to inflict the minimal amount of damage on Canada, and to have frankly the strongest possible impact in the United States. Our trade officials have worked on this list, very, very carefully. And we do hope that when Americans look at this list, they will understand why having a tariff dispute is a really bad idea,” Freeland said. “We will not back down.”
On Thursday, Trump announced his plans to impose a 10-per-cent tariff on raw aluminum from Canada as of Aug. 16. The tariffs on unprocessed aluminum imports from Canada are being levelled under Section 232 of the U.S. Trade Expansion Act, which states the imports pose a threat to American national security.
Freeland called Trump’s tariffs “unnecessary, unwarranted and entirely unacceptable,” and said they are the “last thing anyone needs” right now given the current state of the economy amid COVID-19.
“They should not be imposed,” she said, pointing out that the washing machines at the Whirlpool plant where Trump made the announcement will become more expensive for Americans and less competitive globally as a result.
Canada’s promise of retaliatory efforts came within hours of Trump announcing the tariffs, and amid accusations from the opposition parties in Canada that the Liberal government was slow to act..
Ontario Premier Doug Ford said he talked to Freeland on Friday morning about the “totally unacceptable” tariffs, and is encouraging consumers to buy Canadian-made products.
“We buy more goods off the United States than China, Japan, U.K. combined. Who does this? At times like this, who tries to go after your closest ally? Your closest trading partner? Your number one customer in the entire world? Who would do this? President Trump did this, and I encouraged the deputy prime minister to put retaliatory tariffs on as many goods as possible,” Ford said.
'MOST PROTECTIONIST ADMINISTRATION'
In unveiling his latest planned trade action, Trump accused Canada of “taking advantage,” of the United States. He claimed that the American aluminum business has been “decimated” by Canada, calling it “very unfair” and accusing Canadian producers of flooding the U.S. with exports.
Canadian and American aluminum groups have disputed that assertion, and other business groups have stated the tariffs will hurt businesses on both sides of the border.
Aluminum Association of Canada President and CEO Jean Simard told CTV News that Canadian producers are not dumping aluminum — the term for when selling under domestic price — rather that Canada is selling at the current international price.
In a statement, President and CEO of the Aluminum Association Tom Dobbins said his organization — which represents aluminum production and jobs in the United States — called the reports of dumping “grossly exaggerated,” and “cherry-picked” from the data by a small set of companies that are set to benefit.
Freeland took her criticism a step further on Friday saying that Trump’s latest move shows that “this U.S. administration is the most protectionist administration in U.S. history.”
“I think the important point for Canadians to understand and above all, for Americans to understand is that the first casualties, the first victims of these tariffs will be Americans themselves. That's what's so unfortunate about all of this,” she said.
2018 ALL OVER AGAIN?
This is not the first time in recent history that there’s been an exchange of tariffs between Canada and the United States. Trump hit Canada with steel and aluminum tariffs in May 2018, during negotiations for the new NAFTA deal, which has only been in effect for a month.
The tariffs remained in place for a year, during which time Canada reciprocated with $16.6 billion in countermeasures on American steel and aluminum, as well as levelling a surtax on other goods including coffee, prepared meals, pizza, chocolate, condiments, toiletries, beer kegs, whiskeys, various household items, and motorboats. It took a year for those tariffs to be lifted.
“Our government will always defend our aluminum industry and Canadian workers. As we did during the NAFTA negotiations, we will take a ‘team Canada’ approach,” Freeland said.
Section 232 was also used as justification by the Americans during the 2018 exchange of tariffs. As was the case then, Freeland decried the accusation of Canada in any way being a national security threat to the U.S.
“That is a ludicrous notion. On the contrary, Canadian aluminum is essential for U.S. industry, including the U.S. defense industry. Canada has, for decades, been a reliable supplier of aluminum,” she said.
The current rules of origin for automobiles within the new NAFTA state that 70 per cent of the steel and aluminum purchased by North American automakers has to be produced in North America, meaning Trump’s move will result in prices going up on both sides of the border.
In an interview on CTV News Channel, Democrat and former U.S. ambassador to Canada Bruce Heyman said Trump’s move is political and tied to the upcoming presidential election.
“He's going back to an old playbook, the playbook of 2016 where he was accusing our allies of taking advantage of the United States. If he felt that that helped him and he could win in the Midwest with that,” Heyman said. “It has real world implications to our relationship with each other, to aluminum workers, and by the way, we have a beer cans shortage in the United States… And so the at the end of the day, these prices are all going up and American consumers going to pay more.”
Simon Lester, a trade policy analyst with the CATO Institute in D.C., also cited the upcoming election when asked about Trump’s motivations on tariffs.
“Trump believes that tariffs are good for the economy, and they're good politically for him...This is one of his core policy beliefs,” he told CTV’s News Channel. “We’ll get a verdict on all of this in November.”
Freeland said she remains optimistic that in the week ahead the Americans will realize the negative impacts this trade move will have domestically and decide to back away from imposing the tariffs before they come into effect.
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Interactive by Mahima Singh