Canada announced billions of dollars in retaliatory tariffs against the US in a tit-for-tat response to the Trump administration\u2019s duties on Canadian steel and aluminium.<\/p>\n
Prime Minister Justin Trudeau\u2019s government released the final list of items on Friday that will be targeted beginning July 1. Some items will be subject to taxes of 10 or 25 per cent.<\/p>\n
\u201cWe will not escalate and we will not back down,\u201d Canadian Foreign Minister Chrystia Freeland said.<\/p>\n
The taxes on items including ketchup, lawn mowers and motor boats amount to $12.6 billion.<\/p>\n
\u201cThis is a perfectly reciprocal action,\u201d Freeland said. \u201cIt is a dollar for dollar response,\u201d Freeland said they had no other choice and called the tariffs regrettable.<\/p>\n
Many of the US products were chosen for their political rather than economic impact. For example, Canada imports just $3 million worth of yoghurt from the US annually and most of it comes from one plant in Wisconsin, the home state of House Speaker Paul Ryan. The product will now be hit with a 10 per cent duty.<\/p>\n
Another product on the list is whiskey, which comes from Tennessee and Kentucky, the latter of which is the home state of Republican Senate leader Mitch McConnell.<\/p>\n
Freeland also said they are prepared if U.S. President Donald Trump escalates the trade war.<\/p>\n
\u201cIt is absolutely imperative that common sense should prevail,\u201d she said. \u201cHaving said that our approach from day one of the NAFTA negotiations has been to hope for the best but prepare for the worst.\u201d<\/p>\n
Trump has explained the steel and aluminium tariffs by saying imported metals threatened the United States\u2019 national security a justification that countries rarely use because it can be so easily abused. He is also threatening to impose another national security-based tariff on imported cars, trucks and auto parts. That threat could be a negotiating ploy to restart talks on the North American Free Trade Agreement.<\/p>\n
Canadians are particularly worried about auto tariffs because the industry is critical to Canada\u2019s economy. Freeland said such tariffs would be \u201cabsurd\u201d because the North American auto industry is highly integrated and parts made in Canada often go to cars manufactured in the US and then sold back to Canadians. \u201cAny trade action is disruptive on both sides of the border,\u201d Freeland said.<\/p>\n
Freeland said an \u201cintensive phase\u201d of NAFTA renegotiations will resume quickly after Sunday\u2019s elections in Mexico.<\/p>\n
\u201cI don\u2019t think we\u2019ll see any reaction from the Trump administration. They are prepared for this,\u201d said Dan Ujczo, a trade lawyer in Columbus, Ohio. \u201cCandidly, the Canadian retaliation is a drop in the bucket compared to the retaliation that we\u2019re going to see from China and elsewhere.\u201d<\/p>\n
Ujczo doubts Trump will announce auto tariffs because that would be a \u201cred line for the US Congress\u201d before the midterm election.<\/p>\n
The US Department of Commerce is holding hearings on auto tariffs in late July and will subsequently release an investigative report about whether they threaten national security.<\/p>\n
\u201cI don\u2019t think Congress right now is expected to get engaged until after the midterm election. They\u2019ve given the president a long leash and will continue to do so. The auto tariffs would disrupt that. It would change the calculus,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"
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