Canada Hits Back at US

Conservative MP Maxime Bernier talks with media in Ottawa on Wednesday

Conservative MP Maxime Bernier talks with media in Ottawa on Wednesday

Canada will hit back against USA tariffs on its steel and aluminum by offering affected companies and workers up to C$800 million ($603 million) in aid, a source familiar with the matter said on Thursday.

It reached new depths at the recent G7 summit when Trump abruptly rejected the joint statement and insulted his Canadian host, Prime Minister Justin Trudeau.

Earlier in the day the federal government unveiled an updated list of US products that are about to be slapped with tariffs while promising to spend up to $2 billion to protect steel, aluminum and manufacturing jobs on this side of the border in the wake of a burgeoning trade war with the U.S.

The Canadian tariffs will come into effect on July 1 and largely target US steel and aluminum products, but also foodstuffs such as coffee, ketchup and whiskies, according to a list by the Department of Finance. Some items will be subject to taxes of 10 or 25 percent.

Trudeau also spoke by phone with President Enrique Peña Nieto of Mexico.

The European Union and Mexico, both targeted by the same tariffs on their steel and aluminum, put their retaliatory tariffs into effect immediately.

"The two leaders agreed to stay in close touch on a way forward", it said.

Several countries, including Canada, are challenging that rationale with complaints against the United States to the World Trade Organisation (WTO).

"That is what we are doing", said Foreign Minister Chrystia Freeland, making the announcement at a steel plant in Hamilton, Ontario flanked by brawny workers in yellow hardhats. Trudeau updated the president on Canada's tariffs on USA imports, according to the readout, which also said the two leaders discussed "the North American Free Trade negotiations and agreed to continue working toward a mutually beneficial outcome".

On support for businesses and workers, Friday's federal package includes similar measures to those offered by Ottawa previous year in response US duties on softwood lumber products from Canada. It's not known how much of that money will come to Alberta (our steel exports to the United States are worth about $500 million compared to about $7 billion for all of Canada).

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Tariffs on steel and aluminum products were announced earlier this year by the president.

"Our approach is we will not escalate, but equally we will not back down", Freeland insisted.

"It is absolutely imperative that common sense should prevail", she said.

US officials have also linked the tariffs to slow progress in talks to modernize the North American Free Trade Agreement, which Trump says is a disaster and must be changed.

U.S. commerce secretary Wilbur Ross last week defended the Trump administration's tariffs before Congress but admitted that Canada's steel industry was "not being accused of directly or individually being a security threat".

Among the actions the chamber recommends are continuing to pursue the case through the World Trade Organization (WTO), trying to open new markets to Canadian goods beside the USA and making concessions to the Americans on areas such as supply management in dairy.

Canada would "not back down" in the face of new United States tariffs on steel and aluminium, according to the country's foreign minister.

U.S. President Donald Trump has floated the idea of additional tariffs of 25 per cent on all vehicles crossing the American border - an action industry and experts warn would hammer the Canadian economy. Indeed, Canada is recognized in U.S. law as part of the U.S. National Technology and Industrial Base related to National Defence.

Freeland called it "the strongest trade action Canada has taken in the postwar era".

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