Canada hits back at US with tariffs on summertime essentials
Ottawa: Canada hit back at the US with retaliatory tariffs on American summertime essentials including Florida orange juice, ketchup and Kentucky bourbon in its opening salvo in a trade war with President Donald Trump. As temperatures and tensions increase, the measures targeting Canadian dollar 16.6 billion (USD 12.6 billion) in US steel, aluminum and consumer goods will take effect tomorrow, when Canadians celebrate a national holiday and just days before Americans celebrate Independence Day amid a heatwave expected in both countries.
The tit-for-tat duties are a response to the punishing US steel and aluminum tariffs imposed at the start of June. Ottawa also unveiled Canadian dollar 2 billion (USD 1.5 billion) in aid for the two sectors and their 33,500 workers.
Ottawa "had no choice but to announce reciprocal countermeasures to the steel and aluminum tariffs that the United States imposed on June 1, 2018," Prime Minister Justin Trudeau told Trump in a call on Friday, according to a statement from his office. "The two leaders agreed to stay in close touch on a way forward," it said.
Canadian Foreign Minister Chrystia Freeland announced the tariffs at a steel facility in Hamilton, Ontario where she was flanked by brawny workers in yellow hardhats.
"We will not escalate and we will not back down," she said, while noting that this trade action was the strongest Ottawa has taken since World War II.
But she said the move was made with "regret" and "very much in sorrow, not in anger" against a close ally.
The list of more than 250 US goods subject to Canadian duties -- including Florida juice, Wisconsin toilet paper and North Carolina gherkins, which are labor intensive to produce -- aim to pressure Trump supporters key states in November's US midterm elections. The penalties will add 25 percent to the cost of US steel, and 10 percent to aluminum and consumer goods.
Canada and Mexico initially were exempted from the US metals tariffs -- as was the European Union -- but Trump allowed the duties to take effect June 1 after talks stalled to revamp the 1994 trilateral North American Free Trade Agreement (NAFTA).
After the EU unveiled similar retaliatory tariffs, US Trade Representative Robert Lighthizer earlier this week lashed out calling them groundless and illegal. "These retaliatory tariffs underscore the complete hypocrisy that governs so much of the global trading system," he said in a statement, and "do great damage to the multilateral trading system."
Business executives warned lawmakers this week that escalation into an all-out trade war would be devastating to the Canadian economy, which sends about 75 percent of its exports to the US.