The Trudeau government today released a finalized listing of retaliatory countermeasures against the Trump administration’s steel and aluminum tariffs that will become effective July 1, 2018.
Repeating that it is “inconceivable and completely unacceptable to view any trade with Canada as a national security threat to the United States,” Ottawa says it had no alternative but to respond in a “direct, measured and proportional” manner by imposing “reciprocal surtaxes” on $16.6 billion worth of imports from the U.S.
Noting the United States currently has a $2 billion annual trade surplus on iron and steel products with Canada, which accounts for over 50% of U.S. exports – more than any other country in the world by far – and that Canada is recognized in U.S. law as part of the U.S. National Technology and Industrial Base related to National Defence, the government says that it “regrets” having to take countermeasures, “but the U.S. tariffs leave Canada no choice but to defend our industries, our workers and our communities, and we will remain firm in doing so,” according to a statement by Foreign Affairs Minister Chrystia Freeland.
Government ministers also released details of a “comprehensive” financial aid package for industries and workers caught in the crossfire, which includes up to $2 billion in fresh funding and loans for Canada’s steel, aluminum and downstream manufacturing sectors.
Batting away another argument made by the Trump administration for not granting Canada an exemption from its metals tariffs, the federal government reiterated that it has taken steps and introduced additional customs safeguards in recent months to address concerns about circumvention, diversion and dumping of products into the Canadian market.
Testifying before lawmakers in Washington last week, U.S. Commerce Secretary Wilbur Ross expressed concerns about the world’s overproduction and overcapacity of steel, saying the U.S. tariffs against Canada and other allies are designed to force them into action.
However, the Trudeau government has strenuously insisted that Canada already had one of the toughest trade enforcement regimes concerning the treatment of steel imports and introduced stronger safeguards on steel well before the U.S. imposed its metals tariffs. Freeland said the additional measures were implemented not only to ensure Canada is a good trading partner, but primarily to protect Canada’s own national interest by keeping Chinese steel and aluminum from being unfairly dumped into the market.
- Finance Canada: Finalized List of Tariff Countermeasures
- Customs Notice 18-08: Surtaxes Imposed on Certain Products Originating in the United States
- U.S. CBP Backgrounder on Section 232 Tariffs on Aluminum and Steel
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GHY will reach out to those clients likely to be most adversely impacted by the new tariffs. Additionally, prior to final transaction accounting, importers will be given insight to the impact of applicable surtaxes.
We encourage importers to leverage our toolkit that will help support your ability to plan, act and measure these trade impacts. Watch Al Dewar, our VP of Client Services and Regulatory Affairs speak to our Tools of the Trade: Understanding Your Cross Border Trade Toolkit.
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