Published: Sat, June 30, 2018
Finance | By Gustavo Carr

Canada to aid steel, aluminum industries hit by US tariffs

Canada to aid steel, aluminum industries hit by US tariffs

Canada has struck back at the Trump administration over United States steel and aluminum tariffs, vowing to impose punitive measures on $16.6bn Canadian dollars ($12.63bn) worth of American goods until Washington relents. Some items will be subject to taxes of 10% or 25% amounting to $16.6 billion (Rs 1 lakh 13,600 crore) in tariffs.

If Trump steps up his attacks on Canada's economy and imposes a 25 percent tariff on automobiles as threatened, it would lead to "carmageddon", Flavio Volpe, president of the Automotive Parts Manufacturers Association, told a Commons committee hearing on Tuesday.

Since then, the Tories have launched their own "defend local jobs tour", to hear from workers and businesses impacted by the tariffs and threats of further trade action; while the NDP got unanimous consent from all sides in the House of Commons to pass a motion backing Canadian steel, aluminum, and supply management sectors, while condemning "disparaging ad-hominem statements by US officials".

"It is with regret that we take these countermeasures, but the USA tariffs leave Canada no choice but to defend our industries, our workers and our communities, and we will remain firm in doing so", she said.

USA officials have also linked the tariffs to slow progress in talks to modernize the North American Free Trade Agreement, which Trump says is a disaster and must be changed.

"Canada has no choice but to retaliate in a measured, reciprocal, dollar-for-dollar response", Canadian Foreign Affairs Minister Chrystia Freeland said Friday at a steel manufacturing facility flanked by workers.

Canadian politicians are hoping the tit-for-tat strategy will convince Trump to back down and we'll go back to being the best of trading buddies.

"It is a reciprocal action".

-Canada border. Woodbridge says his is one of the last pickle-packing companies in the country, doing just over a million Canadian dollars ($761,125) a year in sales. "We are perfectly within our rights to respond".

Jim Watson, a Liberal Party politician serving as Ottawa's mayor since 2010, told reporters Thursday that he's boycotting the USA ambassador's annual Independence Day party over the Trump administration's recent anti-Canadian sentiments.

The Trump administration in May launched an investigation into whether imported vehicles posed a national security threat.

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

The government's decision to stand up to Trump by striking back with countermeasures has attracted wide support in Canada - but domestic businesses, particularly those in the steel sector, have expressed deep concerns about any escalation in the trade battle. For example, Canada imports just $3 million worth of yoghurt from the USA annually and most of it comes from one plant in Wisconsin, the home state of House Speaker Paul Ryan.

GM, which makes many vehicles for the United States market in Mexico and Canada, said the tariffs could hike vehicle prices and reduce sales.

While opposition parties have so far largely backed Prime Minister Justin Trudeau for standing up to Trump, their support could be tested once the USA tariffs start to bite.

"I think that prediction has been borne out and I think all of us anticipate there will be some moments of drama in the future".

In 2017, about $14 billion of steel was traded between Canada and the United States.

NAFTA negotiations are expected to move into an "intensive phase" following national elections in Mexico on Sunday.

Freeland has insisted that Canada introduced stronger safeguards on steel well before the US imposed the tariffs.

Bains, the economic development minister, said the support is aimed at helping firms adjust to the hard circumstances while enabling them to continue to innovate along the way.

Auto giant General Motors warned imposing auto tariffs "risks undermining GM's competitiveness against foreign auto producers", driving up the cost of imported components and reducing sales.

Our federal government is also putting aside $2 billion to help Canadian companies hit by the trade crossfire.

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