September 30, 2020

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Canada plans $3.6 billion in retaliatory tariffs on U.S. in aluminium dispute

President Donald Trump speaks during an event at the Whirlpool Corporation facility in Clyde, Ohio, Thursday, Aug. 6, 2020. (AP Photo/Susan Walsh)

President Donald Trump speaks during an event at the Whirlpool Corporation facility in Clyde, Ohio, Thursday, Aug. 6, 2020. (AP Photo/Susan Walsh)

OTTAWA - Deputy Prime Minister Chrystia Freeland delivered a blistering rebuke of U.S. President Donald Trump's latest trade tirade Friday, calling his decision to bombard Canada with new tariffs on aluminum absurd, useless and unjustified.

Freeland said Canada will retaliate within the next 30 days with $3.6 billion in import tariffs on American goods that contain aluminum, after consulting with industry in Canada on which products to hit.

Freeland was speaking in Toronto a day after Trump announced he was reimposing a 10 per cent import tax on Canadian raw aluminum because Canada had broken a promise not to flood the U.S. market with the product.

Freeland said that was simply not true and that imposing trade penalties in the middle of the COVID-19 pandemic is "unnecessary, unwarranted and entirely unacceptable."

"In imposing these tariffs, the United States has taken the absurd decision to harm its own people at a time its economy is suffering the deepest crisis since the Great Depression," she said.

"Any American who buys a can of beer or a soda or a car or a bike will suffer."

In fact, the washing machines that formed a backdrop for Trump during his announcement at a Whirlpool factory in Ohio Thursday, will cost more because of the tariffs, she said.

Washing machines are on a list of more than five dozen aluminum-containing products that Canada is considering for retaliatory tariffs. So are bicycles, golf clubs, hockey sticks, playground equipment, and aluminum foil.

The dollar figure $3.6Bn is seen on deputy Prime Minister Chrystia Freeland's notes as she speaks during a press conference in Toronto, Friday, Aug. 7, 2020. THE CANADIAN PRESS/Cole Burston

The dollar figure $3.6Bn is seen on deputy Prime Minister Chrystia Freeland's notes as she speaks during a press conference in Toronto, Friday, Aug. 7, 2020. THE CANADIAN PRESS/Cole Burston

Freeland said the goal is to inflict the least damage on Canada while having the "strongest possible impact" on the United States. She said the retaliation will be "reasonable" but match the U.S. tariffs "dollar for dollar."

Ontario Premier Doug Ford, who the Liberals used to enjoy comparing to Trump, echoed Freeland's criticisms of the U.S. president. The two spoke early Friday about the tariffs. Freeland said she thanked Ford for his support and his friendship.

Ford encouraged Canadians to buy made-in-Canada products over U.S.-made ones to remind Trump that Canadians are Americans' biggest international customers.

"Who does this?" Ford, said incredulously. "In times like this, who tries to go after your closest ally, your closest trading partner, your number 1 customer in the entire world? President Trump did this."

He also raised the spectre of Trump going after Canadian steel with tariffs as well.

In 2018, the Trump White House slapped a 25 per cent tariff on Canadian steel and 10 per cent on aluminum. Those were lifted in May 2019.

Freeland said the White House would need to answer any questions about steel but noted that in the last couple of months the threats coming out of Washington, and the conversations Canada was having with them, were related only to aluminum.

The U.S. says Canadian producers increased the amount of raw aluminum going into the U.S. more than 80 per cent since the tariffs were lifted in 2019. The Aluminium Association of Canada said raw aluminum shipments increased because the COVID-19 pandemic shut down factories, cancelling orders for processed aluminum products such as car parts for auto manufacturers.

Because smelters cannot just be turned off, they continued to produce the raw products. It was shipped to the U.S. for storage for use later on. The association said as factories resumed operations in June and July, more value-added goods were exported and less raw aluminum.

Bruce Heyman, a former U.S. ambassador to Canada, said he has not heard specifically that steel will be targeted. He said he does worry Trump is "trying to pick a fight" because he is trailing in the polls ahead of the November presidential election.

"This is just so bad," said Heyman, who is backing Trump's Democratic opponent Joe Biden in the presidential race. "It so clearly has the stench of pure politics and it affects real jobs and real lives."

Heyman said Canada had no choice but to retaliate and it seems to be an equivalent response, but he does worry it will provoke Trump into a trade war that he thinks will help him woo American voters.

In 2018, when the first tariffs were applied to steel and aluminum, Canada hit back with $16.6 billion in tariffs on products. Many were politically aimed to hurt factories and workers in electoral districts held by key Republicans. Heyman said there were many Republicans who complained to the White House about that.

This time, he said, he doesn't think those voices will mean anything to Trump.

"He's fighting for his own survival right this minute," said Heyman.

Jack Mintz, president's fellow in the School of Public Policy at the University of Calgary, said retaliatory tariffs are politically attractive, but may wind up hurting Canada as much as they do the United States.

He said the U.S. tariffs are opposed by some members of the aluminum industry in the U.S. and Canada should work with those allies to try to head off such anti-free-trade moves. He also noted that Trump and Biden are both promoting "U.S.-first" policies as they try to enlist voter support.

Biden said this week he would re-evaluate U.S. tariffs on Chinese imports, but has not weighed in on the aluminum tariffs yet.

Heyman said he thinks that if Democrats gain control of both the White House and Congress, one could expect a review of the White House's use of national security as an excuse to impose tariffs on imports.

This report by The Canadian Press was first published Aug. 7, 2020.

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