Canada has officially confirmed retaliatory tariffs on US products worth $12.5 billion (C$16.6 billion). The levies came into effect Sunday, July 1, when the country was marking its 151st birthday.
The duties apply to U.S. metal products, which will now cost US exporters 25% more. Canada has also slapped America with a tariff of 10% on consumer goods, such as maple syrup, whiskey, yoghurt, lawnmowers, ketchup, orange juice, mattresses, and beer kegs.
Canada effected the tariffs as a retaliation measure against the 25% and 10% tariffs that President Trump imposed on its steel and aluminum exports to the US. Trudeau administration expects the tariffs to stay on until America scraps its own tariffs.
Trudeau paid tribute to the Canadian working class who will be hit hard by the US-Canada trade war. In his official Canada Day address, the Prime Minister said,
“Canada’s workers build the roads and bridges that get us to work on time and back home again. From Ontario steel to Quebec aluminum, from agriculture and the energy sector in the Prairies and the North, to forestry in British Columbia and fisheries in the Atlantic, Canadians get the job done – and build our communities along the way.”
Trudeau continued,
“From Ontario steel to Quebec aluminum, from agriculture and the energy sector in the Prairies and the North, to forestry in British Columbia and fisheries in the Atlantic, Canadians get the job done – and build our communities along the way. We know we can count on Canadians. We stand with each other, and we will always stand up for each other. Canada’s success has always come from its people – lifting each other up, one community at a time.”
Canada is also offering to finance some of the metal businesses that are likely to find themselves in the midst of its trade war with the US. Senior officials within the Trudeau administration say the tariffs are meant to put political pressure on America and force Trump to retreat.
Meanwhile, China is also rolling out new duties on more than $34 billion worth of US products, including some dairy goods and soybeans. The tariffs are set to come into effect this Friday, with the Asia giant also likely to target American autos.
The European Union also initiated its own levies on over $3.2 billion worth of US exports to member nations. EU’s duties took effect on June 22, in response to Trump’s move to enact duties on imported aluminum and steel goods originating from European countries.
US companies that rely heavily on steel and aluminum imports are already feeling the pinch of the retaliatory tariffs against the protectionist trade policies of the current US administration.
Last week, Harley-Davidson warned that expansive tariffs would force it to move some of its production abroad. The announcement by the motorcycle maker triggered a furious response from the President.
General Motors has also expressed concerns that new tariffs could “lead to a smaller GM, a reduced presence at home and abroad for this iconic American company, and risk less – not more – US jobs”
Mid Continent Nail Corp, the biggest nail manufacturer in the US, reportedly cut off about 60 of its 500 employees last month. The Missouri-based company is also expected to lay off 200 more by later this month due to tariffs.
Sources
https://www.ft.com/content/80d2f9be-7bd9-11e8-8e67-1e1a0846c475
https://www.nytimes.com/2018/06/25/business/harley-davidson-us-eu-tariffs.html
