Calling the U.S. decision to impose tariffs on Canadian steel and aluminum "absurd" and "inconceivable," Canadian officials threatened retaliatory tariffs on billions of dollars' worth of annual U.S. exports including steel, aluminum and many types of everyday consumer goods.
Canadian Prime Minister Justin Trudeau and Canadian Minister of Foreign Affairs Chrystia Freeland said in a May 31 news conference in Ottawa, Ontario, that the measures would be aimed at products worth C$16.6 billion, reciprocal to the value of Canadian exports targeted by the Trump administration earlier in the day.
Canada's reaction followed retaliatory threats by the European Union and Mexico earlier the same day after their temporary exemptions expired and Trump said they, too, would face 25% tariffs on steel and 10% tariffs on aluminum imports to the U.S.
Canada's Department of Finance published two proposed lists of U.S. goods to hit with 25% and 10% tariffs. The first list, to be hit with 25% tariffs, includes types of non-alloy steel, tubes and types of pipes.
The second list, largely made up of consumer products to be slapped with 10% tariffs, includes American aluminum products, yogurt, coffee, candies, pizza, orange juice, ketchup, whiskeys, dishwasher detergents and water. The list also includes sleeping bags, mattresses, tableware and plywood.
The Canadian tariffs are slated to go into effect on July 1 and will remain in place until the U.S. exempts Canada from the steel and aluminum tariffs, Freeland said. Canada is holding a 15-day public comment period to give Canadians time to weigh in with concerns or support for the products listed.
Freeland called the list of products "very carefully" considered and put together, one that she said the country has been working on for "some time." Canada selected goods for which there are either Canadian alternatives or alternatives produced in a country other than the United States as to not raise prices for Canadian consumers.
"This is C$16.6 billion of retaliation," Freeland said. "This is the strongest trade action taken in the post-war era. This is a very strong response. It is a proportionate response. It is perfectly reciprocal."
Canada had been given an exemption from the 25% and 10% U.S. tariffs on steel and aluminum imports, with a permanent exemption contingent on a successful rework of the North American Free Trade Agreement. Those talks stalled in recent weeks.
In the joint press conference with Freeland, Trudeau called the steel and aluminum tariffs imposed by the U.S. on Canada beginning June 1 "totally unacceptable," especially considering that Canadian aluminum is used in American fighter jets and his country's steel is used in American tanks. The Trump administration imposed the tariffs on the grounds of national security.
"That Canada could be considered a national security threat to the United States is inconceivable," Trudeau said. "These tariffs will harm industry and workers on both sides of the Canada-U.S. border, disrupting linked supply chains that have made North American steel and aluminum more competitive around the world."
"I want to be very clear about one thing: Americans remain our partners, our allies, and our friends," Trudeau added. "This is not about the American people. We have to believe that at some point common sense will prevail. We see no sign of that in this action today by the U.S. administration."
Trudeau said Canada is still open to talks toward a new NAFTA, discussions he said neared a deal last week.
The Canadian prime minister said he made a personal offer to Trump to visit Washington with Freeland to hammer out the final details of an agreement, which he said involved a "win, win, win" deal that was on the table.
However, Trudeau said U.S. Vice President Mike Pence informed him that the precondition for such a meeting would be for Canada to accept a five-year sunset clause on a NAFTA deal, which has been among the thorniest issues encountered by negotiators over the past 10 months of talks.
"There is no possibility of any Canadian prime minister accepting a five-year sunset clause," Trudeau said. "Obviously that visit didn’t happen."
Mexico, the other NAFTA partner, said it would target American flat steel, lamps, pork products and food preparations, apples, grapes, blueberries and other products in retaliation after it too lost its temporary exemption. The European Union said it will pursue a WTO dispute settlement case and impose its own additional duties on yet-to-be named U.S. exports.
Freeland said the United States' action not only violated terms of NAFTA but also World Trade Organization rules. She said Canada would launch a dispute settlement with the WTO and would collaborate with the EU to challenge what she called "illegal and counterproductive" measures.
