Canada Finalizes Tariffs on US Goods, Vows Aid for Workers

June 29, 2018
“We will not escalate, and we will not back down,” said Foreign Minister Chrystia Freeland, who also said that the U.S. measures are “illegal” and America has a trade surplus with Canada on iron and steel.

Justin Trudeau’s government finalized tariffs on C$16.6 billion (US$12.6 billion) of American goods and pledged money to support companies and workers hurt by U.S. levies on Canadian steel and aluminum exports.

Foreign Minister Chrystia Freeland announced final measures on June 29 that take effect on Canada’s July 1 national holiday. Products like beer kegs, mustard and certain jams were removed from the final list, which otherwise doesn’t stray far from an earlier proposal.

The tariffs mirror the value of those imposed by President Donald Trump’s administration. Canada will apply a 25% tariff on steel products, and 10% on aluminum and consumer goods. The levies will remain in effect until the U.S. eliminates its tariffs on Canadian steel and aluminum.

“We will not escalate, and we will not back down,” Freeland told reporters at a steel mill in Hamilton, Ontario. “We are acting in very close collaboration with our like-minded partners in the European Union and Mexico.” She also reiterated the U.S. measures are “illegal” and America has a trade surplus with Canada on iron and steel.

Canada will provide as much as C$2 billion in assistance for affected workers, including plans to expand a work-sharing program and enhancements to a corporate innovation fund, similar to steps the government took to cushion the impact of a softwood lumber spat.

Quotas Coming?
The country is also said to be preparing a further set of quotas and tariffs on steel from other countries, to prevent dumping or diversion after the U.S. tariffs kicked in. Innovation Minister Navdeep Bains said Friday alongside Freeland that he will act soon on that file, while declining to provide details of how it would work.

The tariff response it the latest development in an escalating spat between the two countries, which trade more than $500 billion in goods annually. The U.S. and Canada are also in talks to update the North American Free Trade Agreement, which includes Mexico.

The Americans have applied tariffs to Canadian softwood lumber, and are threatening to do so on autos. The latter move is seen as a major threat to Canadian growth and to the North American auto sector, since U.S. carmakers rely heavily on supply chains that include its two neighbors.

 By Josh Wingrove and Greg Quinn

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