Canada to impose $3.6B in tariffs in response to Trump's move against Canadian aluminum

The federal governmentwill spend onemonth consulting with Canadians about which U.S. metals products to target with retaliatory tariffsas a new trade dispute flares up with the Trump administration.

The government intends to impose $3.6 billion in punitive countermeasures after a 30-dayconsultationwith business leaders and other Canadians about potential targets from a preliminary list.

"Canada will respond swiftly and strongly,"Deputy Prime MinisterChrystiaFreelandsaid Friday.

Canada's list of potential targets threatens tohit politically sensitive areasnamely, states critical to U.S. President Donald Trump's re-election.

A disproportionate number of the more than five dozen items on Canada's potential hit-list are from key U.S. election swing states, includingpaint dyes andaluminum waste, for which Michigan is a top exporter to Canada;refrigerators and bicycles, for which Wisconsin is the lead exporter; and aluminum powders and bars from Pennsylvania.

Canadian officials insisted the list wasn't drawn up with the U.S. election in mind.

They said they were simply targeting products that use aluminum and happen to be produced in those states, under the terms of anagreement last yearwith the U.S. that setsrules for metals tariffs in North America.

That 2019 pactlifted across-the-board tariffs from the U.S. on Canadian steel and aluminum products, whilesetting limits on what products can be targeted in the event of a future dispute.

That dispute, it appears, has arrived.

Freeland made the announcement a day after Trump re-imposed tariffsof 10 per cent on certain aluminum products, ending a recent period of calm on the U.S.-Canada trade front.

Canadian products being targeted by the U.S. are used as raw materials in other aluminum-based goods. They compriseslightly more than half of Canadian aluminum exports to the U.S. over the past year.

Freelandsaid Canada would seek to avoid escalating the dispute, saying theretaliation would bereciprocal and limited in scope.

She did, however,blast the Trumpadministration calling it the most protectionist in U.S. history. She called its rationale for new tariffs "ludicrous" and "absurd."

She also said Americans would suffer more than anyone else. For example, she predicted a price increase on the very washing machines made at the Ohio plant where Trump announced the tariffs.

"The United States has taken the absurd decision to harm its own people at a time when its economy is suffering its deepest crisis since the Great Depression," she said.

"Any American who buys a can of beeror a sodaor a caror a bikewill suffer. In fact, the washing machines Trump stood in front of yesterday will get more expensive."

She called the tariffs "unnecessary, unwarranted and entirely unacceptable," and said "a trade dispute is the last thing anyone needs" during an economic crisis.

The business community also lambasted Trump.

"Here we go again," said Maryscott Greenwood of the Canadian American Business Council, sayingthis is an especially bad time to trigger a trade war.

'Bad idea'

"Poor timing, bad idea. I don't know what else to say."

In the U.S., a Wall Street Journal editorialaccused Trump of retreating to his favourite political play tariffs in the hope of salvaging his struggling re-election bid.

"[This is] Mr. Trump at his policy worst," said the paper, whose conservative editorial board usually supports Trump, but frequently criticizes him on trade policy.

Canada's premiers are pressing Ottawa to punch back.

Ontario's Doug Ford began a news conference Friday by raising the issue, unprompted. He said he feared steel tariffs might also be imminent, and expressed his annoyance with Trump.

WATCH | Ontario Premier Doug Ford reacts to Trump's tariff announcement:

Ford blasts 'unacceptable' tariffs imposed by Trump

4 years ago

Duration 0:51

Ford said he's disappointed by the U.S. president's move, which comes in the middle of a pandemic. 'Who does this?' he asked.

"I just have tosay how disappointed I am with President Trump right now," Ford said.

"Who would do this [now, in difficult economic times]? Well, President Trump did this.... And I encouraged the deputy prime minister to put retaliatory tariffs as close as possible."

Quebec PremierFranoisLegault, whose province is an aluminum-producing hub, echoed the sentiment. Hetweeted thathe'd asked Prime Minister Justin Trudeau to impose counter-tariffs.

One Canada-U.S. trade insider said Canadian trade officials are usually quite tactical in trade disputes with the U.S., picking targets that cause political pain.

But he suspects any counter-tariffs now won't sway Trump.

"Unfortunately, I do not believe that retaliation [will] be successful in today's environment," said Dan Ujczo, of the U.S.-based Dickinson Wright law firm.

He said the U.S. Congress is now too busy dealing with COVID-19 issues to fight Trump over these tariffs, at least until after the Nov. 3 American election.