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Chrystia Freeland: Canada Will Have $3.6B Response To Trump’s ‘Absurd’ Aluminum Tariffs

The federal government has launched 30-day consultations to determine how to hit back.

Deputy Prime Minister Chrystia Freeland says Canada will retaliate with $3.6 billion in tariffs against the United States in light of the Trump White House’s “absurd” decision to target Canadian aluminum again.

Freeland told reporters in Toronto Friday that Canada will respond “swiftly and strongly” with dollar-for-dollar countermeasures to a planned 10 per cent tariff on Canadian raw aluminum announced by U.S. President Donald Trump Thursday. Those tariffs are set to come into force on Aug. 16, leaving some room for a change of course.

“The United States has taken the absurd decision to harm its own people at a time when its economy is suffering the deepest crisis since the Great Depression,” she said.

Deputy Prime Minister Chrystia Freeland speaks during a press conference in Toronto on Aug. 7, 2020.
Cole Burston/CP
Deputy Prime Minister Chrystia Freeland speaks during a press conference in Toronto on Aug. 7, 2020.

Freeland said a Canada-U.S. trade dispute is the last thing anyone needs at a time when both countries are fighting the COVID-19 pandemic.

“It will only hurt the economic recovery on both sides of the border. However, this is what the U.S. administration has chosen to do,” she said.

The U.S. imposed the same tariff on Canadian aluminum in 2018, as well as a 25 per cent import tariff on steel. Canada fired back at the time with $16.6 billion in tariffs on strategically selected U.S. products. Both sides reached a deal to end the punishing measures in 2019 as part of the successful renegotiation of the new NAFTA deal, now known as the USMCA.

She noted that with the trade pact coming into force on July 1, now is a time to enhance North American economic competitiveness, “not to hinder it.” She also noted the USMCA includes a provision that 70 per cent of aluminum purchased by North American automakers must be produced in North America.

“These tariffs will make it harder for the North American carmakers NAFTA is designed to support,” she said.

Freeland said Canada’s response will again be perfectly reciprocal. “We will not escalate, and we will not back down,” she said.

‘Unnecessary, unwarranted, unacceptable’

The deputy PM blasted the proposed U.S. tariffs as “unnecessary, unwarranted, and entirely unacceptable,” and expressed incredulity that the U.S. administration appears to be again framing the decision as one based on national security concerns.

“Let me be clear, Canadian aluminum in no way a threat to U.S. national security, which remains the ostensible reason for these tariffs. And that is a ludicrous notion,” she said.

Freeland said Prime Minister Justin Trudeau has decided to launch 30-day consultations over which U.S. products containing aluminum could be ripe for retaliation. The federal government has released a broad list of U.S. products that could be targeted, including everything from golf clubs and aluminum foil to refrigerators.

“We invite Canadians and Canadian businesses to participate in these consultations over the next 30 days, after which we will impose retaliatory tariffs,” she said.

At a speech Thursday in Ohio, a key battleground state in November’s presidential election, Trump claimed Canada was “taking advantage of us, as usual” and flooding the U.S. market with Canadian aluminum. The federal government and Canadian aluminum producers say that accusation is totally false.

Jean Simard, president of the Aluminium Association of Canada, told The Canadian Press that raw aluminum exports to the U.S. went up due to the COVID-19 crisis because smelters on this side of the border, unable just to stop running, switched to producing raw products for U.S. warehouses to store. The group said the export balance began to restore in June and July, with raw exports falling 16 per cent in June, and 30 per cent in July.

Freeland pointedly noted that Trump made the announcement during a stop at a Whirlpool manufacturing plant, and she said the washing machines manufactured there will now “become more expensive for Americans and less competitive with machines produced elsewhere in the world, as a result of these tariffs.”

Though she called the Trump administration the most “protectionist in U.S. history,” she would not weigh in on whether she felt the decision was an election gambit, nor did she have much to say about the possibility the tariffs could be lifted if presumptive Democratic nominee Joe Biden becomes president.

Freeland hopes ‘common sense’ prevails

Instead, she urged the U.S. to reconsider and expressed hope “common sense” and economic logic would prevail. “I just hope that happens sooner rather than later,” she said.

Freeland also thanked provincial and territorial premiers for supporting the countermeasures in what she called a “Team Canada” approach.

Earlier in the day, Ontario Premier Doug Ford expressed his disappointment in Trump and support for Canada’s planned retaliation.

“In times like this, who tries to go after your closest ally, your closest trading partner, your number one customer in the entire world? Who would do this? Well, President Trump did this,” Ford said.

The reimposition of U.S. aluminum tariffs has been talked about for weeks in light of earlier reports this summer from Bloomberg and the New York Times.

Last month, Trudeau said he told Trump directly that the pandemic had “disrupted unusual manufacturing processes,” leading to a disruption in the aluminium sector that was starting to realign itself.

“I impressed upon him that it would be a shame to see tariffs come in between our two countries at the time where we’re celebrating NAFTA and at a time where we want our businesses and our manufacturers to get going as quickly as possible. We pledged to keep working on it together,” Trudeau said at the time.

With files from Sherina Harris, The Canadian Press

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