Canada will give a “firm and clear” response to the latest trade barriers planned by US President Donald Trump, says Prime Minister Justin Trudeau.
Trump says he will levy a 25% import tax on all steel and aluminium products entering the US from 12 March, meaning both sides have a month to negotiate. Canada is the top exporter of both metals to the US.
Since returning to office last month, Trump has announced a wide range of these tariffs to try to protect US jobs and industries. Economists say they are likely to raise prices for ordinary Americans.
The new tariffs were “entirely unjustified”, Trudeau said, as Canada found itself in a second trade standoff with Washington in a matter of weeks.
Canada was “the US’s closest ally”, he added.
A range of metal-exporting countries are scrambling to make a deal in response to the tariff on steel and aluminium vowed by Trump.
The US imports six million tonnes of Canadian steel products and more than three million tonnes of aluminium products per year – more than from any other country.
Canadian metal exports were making North America as a whole “more competitive and secure”, Canadian Industry Minister François-Philippe Champagne argued on Monday.
Canadian provincial leaders, too, have condemned Trump’s plan. Quebec’s François Legault said his province alone sent millions of tonnes of aluminium to the US per year – asking whether Trump would prefer to source the metal from his rival, China.
Federal official opposition leader, Pierre Poilievre, said he would issue matching tariffs targeting the US, if elected as Canadian prime minister.
The head of the Canadian Steel Producers Association warned that a range of sectors could be hit, saying similar measures by Trump during his first term had damaged industry in both countries.
“We have steel that they need and they have steel that we need… we need each other,” Catherine Cobden told CBC.
Tariffs are taxes charged on goods imported from other countries. Companies that import goods from abroad pay the tariffs to the US government.
Economists warn that they are likely to raise prices for US consumers, for example if sellers choose to raise prices after paying higher duties on imported goods.
US businesses dependent on imports have also raised concerns, but Trump says his plans will boost domestic production. On Monday, he said his plan was “a big deal, the beginning of making America rich again”.
The taxes themselves – which Trump also used during his first term in the White House – are key to the returning president’s economic vision. He is also seeking to address a trade deficit, which means that the US imports more than it exports.
Trump’s allies also say he sees such measures as an essential negotiating tool when he wants another country to do something for him.
Since returning to the White House last month, Trump has already been in one trade standoff with Canada and America’s other neighbour, Mexico.
But he agreed on 4 February to delay for 30 days his threat of 25% tariffs on all goods arriving from both countries. The postponement came after his two neighbours vowed action to tackle illegal migration and the flow of drugs to the US.
Both countries delayed their own retaliatory measures at the same time.
Canada and Mexico are some of Trump’s top trade partners, along with China – which Trump has targeted with a 10% tariff on all goods entering the US. That tax has already come into force, and China has hit back with measures against US goods.
In addition to his other, delayed plan to target Canada and Mexico with specific tariffs, Trump has also hinted he could levy taxes on goods imported from the European Union “pretty soon”.
Asked in recent days about the threat of retaliation from his trade partners, Trump said: “I don’t mind.”
By BBC News
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