Canada on Sunday officially entered
into force a long list of tariffs on goods produced in the United States in
response to the Trump administration’s import tariffs on steel and
In a retaliatory move to Trump
administration’s import tariffs on steel and aluminum, Canada imposed tariffs
on goods produced in the United States calling it a “direct, measured and proportional
response” to the U.S. metals tariffs, targeting a list of products worth $16.6
billion Canadian (U.S. $12.6 billion) in 2017.
Canada said it is seeking to recoup the
expected revenue that will be lost upon imposition of the U.S. tariffs of 25 percent
on steel and 10 percent on aluminum; the countermeasures, it said, “will remain
in place until the U.S. eliminates trade-restrictive measures against Canadian
steel and aluminum products.”
Chrystia Freeland, Canada’s minister
of foreign affairs called the U.S. import tariffs as ‘illegal under WTO and
NAFTA rules—the very rules that the United States helped to write. .
“It is with regret that we take
these countermeasures, but the U.S. tariffs leave Canada no choice but to
defend our industries, our workers and our communities, and we will remain firm
in doing so,” she added. “The real solution to this unfortunate and
unprecedented dispute is for the United States to rescind its tariffs on our
steel and aluminum.”
Canada’s argument against
the U.S. tariffs on imports of steel and aluminum stems primarily from the fact
that they are being imposed pursuant to a determination by the Department of
Commerce that such imports pose a threat to U.S. national security.
“Canada’s steel and aluminum
industries have made North American steel and aluminum more competitive around
the world,” the Canadian government said in its announcement on Friday. “It is
inconceivable and completely unacceptable to view any trade with Canada as a
national security threat to the United States.
“The U.S. has a $2 billion annual
trade surplus on iron and steel products with Canada,” it added. “Canada buys
more American steel than any other country in the world, accounting for 50
percent of U.S. exports. Canadian steel is used in American tanks, and Canadian
aluminum in American planes. Indeed, Canada is recognized in U.S. law as part
of the U.S. National Technology and Industrial Base related to National
The government said it would continue to
“work towards full and permanent removal of these unjustified and illegal U.S.
tariffs.” It will also provide about C$2 billion in subsidies to “defend and
protect the interests of Canadian workers and businesses in the steel, aluminum
and manufacturing industries.”Again, Canada said it wants to limit job losses
during “challenging times” and the plan to achieve this end is to extend the
duration of work-share agreements, to increase funding for regional job
training programs, provide liquidity to support businesses affected by the U.S.
tariffs, offer C$250 million to better integrate Canadian steel and aluminum
supply chains, and invest C$50 million over the next five years to help
Canadian companies diversify exports to take advantage of new trade agreements
like Comprehensive Economic and Trade Agreement (CETA) and Comprehensive and
Progressive Agreement for Trans-Pacific Partnership (CPTPP).