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Tuesday 11 December 2018

Canada retaliates over US metals tariffs

Prime Minister Justin Trudeau’s government has released its final list of retaliatory tariffs.

Chrystia Freeland, Canada’s minister of foreign affairs, speaks during a visit to a steel making factory in Ontario (Peter Power/The Canadian Press via AP)
Chrystia Freeland, Canada’s minister of foreign affairs, speaks during a visit to a steel making factory in Ontario (Peter Power/The Canadian Press via AP)

By Rob Gillies, Associated Press

Canada has announced billions of dollars in retaliatory tariffs against the US.

The tariffs are part of a tit for tat response to the Trump administration’s duties on Canadian steel and aluminium.

Prime Minister Justin Trudeau’s government released the final list of items that will be targeted beginning on July 1. Some items will be subject to taxes of 10 or 25%.

“We will not escalate and we will not back down,” Canadian foreign minister Chrystia Freeland said.

The taxes on items including ketchup, lawn mowers and motor boats amount to 12.6 billion dollars.

“This is a perfectly reciprocal action,” Ms Freeland said. “It is a dollar for dollar response.”

Ms Freeland said they had no other choice and called the tariffs regrettable.

Many of the US products were chosen for their political rather than economic impact. For example, Canada imports just 3 million dollars worth of yogurt from the US annually and most of it comes from one plant in Wisconsin, the home state of US House speaker Paul Ryan. The product will now be hit with a 10% duty.

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.

Ms Freeland also said they are prepared if US President Donald Trump escalates the trade war.

“It is absolutely imperative that common sense should prevail,” she said. “Having said that our approach from day one of the Nafta negotiations has been to hope for the best but prepare for the worst.”

Mr Trump has explained the steel and aluminium tariffs by saying imported metals threatened the United States’ 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.

Ms Freeland said there are no grounds for further US tariffs in response to Canada’s actions.

Canadians are particularly worried about auto tariffs because the industry is critical to Canada’s economy.

Ms Freeland said such tariffs would be “absurd” 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. “Any trade action is disruptive on both sides of the border,” she said.

Press Association

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