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Canada to impose tariffs on USA, challenge at WTO

01 June, 2018, 16:17 | Author: Priscilla Morrison
  • Italy news

Foreign Affairs Minister Chrystia Freeland says Canada plans to levy tariff "countermeasures" of its own on up to $16.6 billion worth of imports of steel, aluminum and other products from the U.S.

The European Union is planning retaliatory tariffs on USA steel and food goods in the coming weeks, once it calculates the exact cost to European Union companies of the U.S. tariffs.

"The American administration has made a decision today that we deplore, and obviously is going to lead to retaliatory measures, as it must", said Canadian President Justin Trudeau.

Ottawa will also challenge the tariffs under NAFTA and World Trade Organisation rules, she said. "That Canada could be considered a national security threat to the United States is inconceivable".

Rather than forcing Canada and Mexico into concessions on Nafta, analysts say, the tariff move is likely to strengthen Canada's and Mexico's resolve to not back down on unconventional US demands for Nafta, such as the elimination of global panels to resolve trade disputes and a new clause under which the pact would expire if not explicitly renewed every five years.

In a move that's widely expected to boost the local steel industry, the Trump administration is expanding its Section 232 steel tariffs of 25 percent to three of the United States' largest trading partners: Mexico, Canada and the European Union.

Mr Trump had campaigned for president on a promise to crack down on trading partners that he said exploited poorly negotiated trade agreements to run up big trade surpluses with the US.

Eric Miller, of the Washington-based Rideau Potomac Strategy Group, said it is possible to move forward with NAFTA on a separate track from the tariff dispute.

That means the USA will now view Canadian steel and aluminum the same way those metals from the rest of the world are viewed - as a potential national security threat.

A key importer of steel is the Mexican auto industry, which is at the center of contention in Nafta negotiations as the US seeks to increase its national content in cars built in the region.




Although many in the United States business community have reacted with alarm, Trump's actions have won him favour in the domestic steel and aluminium industry. Permanent exemption for Canad and Mexico, meanwhile, was said to hinge on a resolution to a renegotiation of the North American Free Trade Agreement, which has yet to materialize.

Huge tariffs on imported steel and aluminium from Europe, Canada and Mexico have come into effect in the United States.

Trump's announcement lifted American steel and aluminum stocks because those companies stand to benefit from penalties against their foreign competitors.

In reality, national security has nothing to do with the new tariffs. "We continue to work closely with our European Union partners and will consider carefully the EU's proposals in response".

"This is the strongest trade action Canada has taken in the post-war era".

"The President has said he believes he could win a trade war". "Tariffs on steel and aluminum imports are a tax hike on Americans and will have damaging consequences for consumers, manufacturers and workers", said Sen.

It's not as if the USA even has the capacity to fill its own need for steel and aluminum. "The goals of restoring American industries to a sustainable operating domestic capacity and protecting national security must remain paramount".

"We take the view that without a strong economy, you can not have strong national security", Ross told reporters.

"Unilateral responses and threats over trade war will solve nothing of the serious imbalances in world trade".

The euro reversed earlier gains as inflation in the eurozone rose to the ECB's target in May, fueled by a huge increase in oil prices as the US chose to pull out of a nuclear deal with Iran.

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