Upping trade dispute with U.S., Ottawa releases list of goods hit with duties
The federal Liberal government is taking its cross-border trade dispute with the United States up a notch, unveiling an extensive final list of $16.6-billion worth of American imports that will be hit with retaliatory tariffs this weekend.
Ottawa also released details Friday of a financial aid package for industries caught in the crossfire -- and it includes up to $2 billion in fresh funding and support for workers in Canada's steel, aluminum and manufacturing sectors.
Foreign Affairs Minister Chrystia Freeland unveiled the details -- including a finished list of U.S. products on Canada's hit list, which takes effect Sunday -- during a news conference at a steel factory in Hamilton.
Aside from reciprocal tariffs on steel and aluminum imports from the U.S., the items to be subject to 10 per cent duties come from a wide range of sectors -- from ketchup, to lawn mowers, to playing cards.
It's all part of Ottawa's plan to strike back at the U.S. in response to hefty tariffs on steel and aluminum, 25 per cent and 10 per cent respectively, imposed last month by President Donald Trump.
Freeland billed Canada's response as dollar-for-dollar countermeasures that are part of a perfectly reciprocal retaliation to what she called the "illegal" and "absurd" tariffs imposed by the Trump administration.
"We are perfectly within our rights to respond -- I'd also like to point out that Canada has quite intentionally been measured and restrained in its response," said Freeland, who was joined at the announcement by Trudeau cabinet colleagues Patty Hajdu and Navdeep Bains.
There are fears, however, that Canadian tariffs -- some of which target businesses in states that are important to Trump and his supporters -- could lead to fresh trade action from the U.S.
Trump himself has already threatened to slap tariffs on the automotive sector, which could prove far worse for the Canadian economy than the steel and aluminum duties.
Freeland, asked whether she feared the U.S. would escalate matters, recalled a public comment she made right before the start of NAFTA negotiations -- another tough Canada-U.S. trade file -- in which she told Canadians the federal government expected "moments of drama in this process."
"I think that prediction has been borne out," she said. "I think all of us, at this point, fully anticipate there will be some moments of drama in the future."
The Trudeau government's decision to stand up to Trump with retaliatory measures has attracted wide support in Canada. But domestic businesses, particularly those in the steel sector, have expressed deep concerns about any escalation in the trade battle.
More broadly, the effects of the trade fight are expected to hurt both economies, which includes putting jobs at risk and potentially raising consumer prices on both sides of the border.
The federal support package includes similar measures to those offered by Ottawa last year in response U.S. duties on softwood lumber products from Canada.
For the latest dispute, the government intends to help affected workers by doubling the duration of work-sharing agreements under the employment insurance program to 76 weeks from 38 weeks. The aim is to help businesses retain skilled workers and avoid layoffs during any rough patches ahead.
Ottawa is also promising to boost funding for the provinces and territories to increase job and training programs.
"In terms of job losses, my message is clear: we stand with Canadian workers and we're prepared to support Canadian workers if and when that happens," said Hajdu, the federal labour minister.
For companies, Ottawa is promising up to $1.7 billion worth of financing and services for steel and aluminum industries through Business Development Bank of Canada and Export Development Canada.
Through its strategic innovation fund, Ottawa is also offering up to $250 million in support in an effort to reinforce the competitiveness of Canadian manufacturers and strengthen the integration of Canada's steel and aluminum supply chain.
Bains, the economic development minister, said the support is aimed at helping firms adjust to the difficult circumstances while enabling them to continue to innovate along the way.
The government also plans to invest $50 million over five years to help firms take full advantage of recent trade agreements, including Canada's deal with the European Union and its membership in the Trans-Pacific Partnership.
The ministers reiterated Friday that Canada has taken steps and introduced safeguards to address concerns about diversion and dumping of products into the Canadian market.
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.
Freeland has long insisted that Canada introduced stronger safeguards on steel well before the U.S. imposed the tariffs.
She said the measures were put in place 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 dumped into the market.