WASHINGTON—The Canadian government is preparing to announce new tariffs on U.S. products, adding to its retaliation list as Prime Minister Justin Trudeau struggles to persuade President Donald Trump to eliminate U.S. tariffs on Canadian steel and aluminum.
Foreign Affairs Minister Chrystia Freeland said the government is seeking a “balance” in which its tariffs cause minimum pain in Canada and “the greatest possible impact” in the United States.
“We are absolutely looking at, as we always do, ways that we can refresh the retaliation list to have an even greater impact,” Freeland told reporters on Tuesday.
Trump initially suggested that his steel and aluminum tariffs were merely a negotiating tool in NAFTA negotiations. But he now argues that they are an effective policy measure in their own right, and he has resisted Trudeau’s calls to drop them now that the NAFTA negotiations have concluded.
David MacNaughton, the Canadian ambassador to the U.S, said Monday that talks over the removal of Trump’s tariffs have faltered. “There are no negotiations at the present moment,” he said, according to Politico.
Among the “significant number” of U.S. agricultural products that might be added to the Canadian list are apples, pork, wine and ethanol, MacNaughton told agriculture journalists in Washington. MacNaughton said the revised list could be released as early as next week, those journalists reported.
The Mexican government is also threatening to add new agricultural tariffs to its retaliation list.
Any new Canadian tariffs will not take effect immediately. MacNaughton said there will be a 45-day public consultation period after the list is released.
He said Canada’s intention is not to “escalate” the situation. Rather, he said, the point is to fulfil Canada’s original pledge of “dollar-for-dollar” retaliation. The government initially said the tariffs would apply to more than $16 billion worth of imports from the U.S., but exemptions granted to some importers have reduced the actual total.
The dispute started with Trump’s 25 per cent tariff on steel and 10 per cent tariff on aluminum. The president controversially used a “national security” trade law as the basis for the tariffs, arguing that the U.S. reliance on foreign metals, even from its neighbour and close ally, was a security problem.
Trudeau’s retaliatory tariffs hit U.S. steel products with a 25 per cent charge and U.S. aluminum products and dozens of other products, from frozen pizzas to mattresses to pens, with a 10 per cent charge. The 10 per cent list was targeted at products made in states and particular congressional districts represented by Trump’s Republican Party.
Canadian tariffs are paid by the Canadian businesses that import the U.S. products. Those businesses frequently pass on their cost increases to consumers.
Trudeau’s government has delivered a series of warnings to the Trump administration over the last month in an effort to nudge the president into removing his tariffs. Freeland has suggested that Parliament will not vote to ratify the new NAFTA deal until Trump’s “illegal and unjust” tariffs are rescinded.
Trump’s team has suggested it is willing to get rid of the tariffs, but only if they are replaced by quotas on how much steel and aluminum Canada can export to the U.S. The Canadian government also opposes the quota proposal.
“The right thing to do with the tariffs is just to lift them,” Freeland said.
