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Trade War: Canada puts retaliatory tariffs into force

 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 aluminum.   

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 Defense.”
 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).

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