The Trump administration’s June 1 imposition of tariffs on steel and aluminum entering the U.S. from Canada and other G7 countries has led to tit-for-tat counter-tariffs from Canada, and left observers wondering if an all-out trade war is looming – or already underway.
Canada responded to the U.S. announcement by announcing its own dollar-for-dollar tariffs on up to $16.6 B of U.S. imports, targeted at goods originating in US jurisdictions represented by influential members of the US Congress. The $16.6 B represents the total value of Canadian 2017 exports affected by the US tariffs. Canada’s tariffs go into effect on July 1.
“[The U.S.] tariffs will harm industry and workers on both sides of the Canada-U.S. border, disrupting linked supply chains that have made North American steel and aluminum more competitive all around the world,” said Prime Minister Justin Trudeau in responding to the U.S. tariffs. “We have to believe that, at some point, common sense will prevail – but we see no sign of that in this action today by the U.S. administration.”
In announcing Canada’s “perfectly reciprocal” countermeasures, which she said were the strongest trade action Canada has taken since WWII, Canadian Foreign Affairs Minister Chrystia Freeland slammed the U.S. measures and promised that Canada would also respond with more than its own tariffs.
“The unilateral trade restrictions by the United States are also in violation of NAFTA and WTO trade rules,” Freeland said. “Canada will therefore launch dispute settlement proceedings under NAFTA Chapter 20 and WTO dispute settlement. Canada will also closely collaborate with like-minded WTO members, including the European Union, to challenge these illegal and counterproductive U.S. measures at the WTO.”
Because the Canadian counter tariffs are designed to impact particular Congressional constituencies in the U.S., they target seemingly incongruous products such as hair lacquer, felt-tipped pens and gherkin pickles, in addition to the more obvious aluminum and steel.
You can watch video excerpts of Trudeau’s and Freeland’s comments here.
