BCN-04 Canada hits US with billions in retaliatory tariffs in steel row

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BCN-04

US-TRADE-DISPUTE-STEEL-CANADA

Canada hits US with billions in retaliatory tariffs in steel row

OTTAWA, June 1, 2018 (BSS/AFP) – Canada hit back at steep US tariffs on
aluminum and steel on Thursday, announcing retaliatory duties on up to
Can$16.6 billion (US$12.8 billion) in American imports.

Prime Minister Justin Trudeau told a news conference the US tariffs were
“totally unacceptable.”

“These tariffs are an affront to the long standing security partnership
between Canada and the United States, and in particular, an affront to the
thousands of Canadians who have fought and died alongside their American
brothers in arms,” he said, noting the US national security justification for
its measures.

“We have to believe that at some point, common sense will prevail. But we
see no sign of that in this action today by the US administration,” the prime
minister said.

The Canadian tariffs, which Foreign Minister Chrystia Freeland said are
proportional to the US duties, will be applied to US steel and aluminum as
well as consumer products from July 1.

These items include yogurt, coffee, sugar, toilet paper, sailboats,
mattresses, washing machines and lawn mowers — all aimed at exerting
pressure on key US states that export a lot to Canada.

At the same time, Ottawa will challenge the “illegal and counterproductive”
US measures under the North American Free Trade Agreement (NAFTA) and at the
World Trade Organization, said Freeland.

The tit-for-tat trade spat comes after nine months of negotiations between
Canada, Mexico and the United States to revamp NAFTA bogged down.

Washington had granted Canada and Mexico an exemption on the metal tariffs
to give the parties time to successfully negotiate a new free trade deal.

But Washington rejected the latest offer from its neighbors to accept a
larger US share of North American auto manufacturing in exchange for the US
dropping other contentious demands.

Trudeau said he spoke with US President Donald Trump last week and offered
to fly to Washington and sit down with him to hammer out the “final details
of NAFTA because there were broad lines of a decent win-win-win deal on the
table.”

But Vice President Mike Pence called back this week to set a NAFTA sunset
clause as a precondition for the meeting, which both Canada and Mexico had
rejected.

Trudeau said he replied that “there was no possibility of any Canadian
prime minister signing a NAFTA deal that included a five-year sunset clause.”

“Obviously, the visit didn’t happen,” he said.

Late Thursday, President Donald Trump said in a statement it was made clear
to Trudeau that the US “will agree to a fair deal, or there will be no deal
at all.”

“The United States has been taken advantage of for many decades on trade.
Those days are over,” he said.

Meanwhile, last month and earlier Thursday, Ottawa also unveiled measures
to stop transshipments of steel and aluminum into the North American market,
hoping to satisfy US concerns and avert a trade war.

But hope faded when US Commerce Secretary Wilbur Ross announced that the
United States would impose tariffs of 25 percent on steel and 10 percent on
aluminum from Canada and others from Friday.

Freeland noted that the United States has a US$2 billion trade surplus with
Canada in steel, and that “roughly half” of all US steel exports go to
Canada.

BSS/AFP/MRI/0904 hrs