New Trade Dispute Arises As Canada Responds To US Tariffs
Updated: Aug 12
BY: Suzann Abraham
Last Thursday, President Trump announced that he was reinforcing a 10% tariff on Canadian aluminum, a move that was to help American producers but will simply prompt retaliation and worsen ties with Canada, especially since a new trade deal went into effect only one month before.
In his announcement, he signed the proclamation, reimposing tariffs on Canada, stating that the country was “taking advantage of us as usual.” Earlier 2018, he imposed tariffs on steel and aluminum from Canada, Mexico, and the EU to which they responded with their tariffs on American goods. They were not lifted until the following year when the nations agreed to a new North American trade deal. But the USA retained the right to re-enforce them if there was a spike in metal imports. President Trump cited it, stating, “My administration agreed to lift those tariffs in return for a promise from the Canadian government that its aluminum industry would not flood our country with exports and kill all our aluminum jobs, which is exactly what they did. Canadian aluminum producers have broken that commitment.”
The tariffs are to be effective starting August 16, applying to raw aluminum which was 59% of Canadian exports of metal into the US. Trump is referring to Section 232 of the Trade Expansion Act that allows the President to impose tariffs for purposes concerning national security.
The Deputy Prime Minister responded, noting it will “raise costs for manufacturers and consumers, impede the free flow of trade and hurt provincial and state economies.” Canadian Prime Minister Justin Trudeau also responded on Twitter saying, “In response to the American tariffs announced today, Canada will impose countermeasures that will include dollar-for-dollar retaliatory tariffs. We will always stand up for our aluminum workers. We did so in 2018 and we will stand up for them again now.”
And so they did.
The following day, the federal government announced that it will impose retaliatory measures at $3.6 billion in the United States. Deputy Prime Minister Chrystia Freeland said the efforts will take place in 30 days after Canadians are consulted on what to target. The government is releasing a list of possible products such as aluminum products like washing machines, refrigerators, and golf clubs. Canadians will be able to send comments to the finance department till September 6. “A trade dispute is the last thing anyone needs. It will only hurt an economic recovery on both sides of the border. However, this is what the U.S. administration has chosen to do,” stated Freeland.
Premier Doug Ford mentioned that he understands the Americans are also planning to impose tariffs on Canadian steel however Freeland declined to comment on this. “There are 40 categories of steel they’re going to go and tack on a certain percentage,” he stated. Two industry sources, with knowledge of such confidential discussions, said there were talks to new steel tariffs but they said it had not gone far. The Premier urged Canadians to buy locally made goods and for retailers to put stickers on their products that said, “made in Canada” or “made in Ontario.” He was also disappointed with the President and his actions. He supported and admired him during the 2016 election campaign.
The effects of this will harm an already poor economy, businesses, and workers.
As the pandemic continues to take jobs, lives, and the normality in people’s lives, a trade battle will not benefit either nation. Economic recovery efforts will be negatively affected. In Ontario, one in five jobs depends on trade, and nearly 400 billion CAD in merchandise travels across the border every year. These are only minor facts that contribute to the entire welfare of the province, eventually affecting the nation as a whole.
If the dispute is not negotiated and proceeds to take place, the Government of Canada stands to support Canadians and consult them at every moment. As for President Trump, this is a negative event in his efforts to be re-elected later this year.
*All arguments made and viewpoints expressed within Youth In Politics and its nominal entities do not necessarily reflect the views of the writers or the organization as a whole.
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