Canada hit back with retaliatory tariffs on American summertime essentials such as Florida orange juice, Ohio ketchup and Kentucky bourbon in its opening salvo in a trade war with President Donald Trump.
The measures targeting 16.6 billion Canadian dollars (USD 12.6 billion) in US steel, aluminum and consumer goods will take effect on Sunday when Canadians across the country will be celebrating a national holiday and just days before Americans celebrate their independence. The tit-for-tat duties follow punishing US steel and aluminum tariffs imposed at the start of June.
Ottawa also unveiled 2 billion dollars (USD 1.5 billion) in aid for the two sectors. "Canada has no choice but to retaliate with a measured reciprocal dollar-for-dollar response. That is what we are doing," said Foreign Minister Chrystia Freeland, making the announcement at a steel facility in Hamilton, Ontario where she was flanked by brawny workers in yellow hardhats. "We will not escalate and we will not back down," she added while noting that this trade action was the strongest taken by Ottawa since World War II and urging the Trump administration to rescind its own tariffs.
The list of more than 250 goods subject to Canadian duties -- including Florida juice, Wisconsin toilet paper or North Carolina gherkins, which are labor intensive to produce -- aim to pressure Trump supporters in November's US midterm elections. They will add 25 percent to the cost of imported US steel and 10 percent to aluminum imports. Canada and Mexico were initially exempted from the US steel and aluminum tariffs but Trump ended this in July amid stalled talks to revamp a 1994 trilateral trade deal. Businesspeople warned Canadian lawmakers this week that an escalation into an all-out trade war would be devastating to the Canadian economy, which sends about 75 percent of its exports to the United States.
If Trump steps up his attacks on Canada's economy and imposes a tariff on automobiles as threatened, it would lead to "carmageddon," Flavio Volpe, president of the Automotive Parts Manufacturers Association, told a Commons committee hearing on Tuesday. Meanwhile, Canadians are overwhelmingly in favor of today's retaliatory tariffs. In Ottawa, officials and others have declined an invitation to the US ambassador's annual July 4th party. "I've politely declined because I'm not happy with the direction of the American government and their constant attacks on our country," Ottawa Mayor Jim Watson told public broadcaster CBC.
Canadian patriotism, meanwhile, has bristled under hashtags like #BoycottUSA, #BuyCanadian and #VacationCanada that urge people not to buy American goods and travel packages. Canada and the US are among the world's two largest trading partners with an estimated USD 673.9 billion worth of goods and services exchanged in 2017, with the US scoring a small surplus (USD 8.4 billion), according to the US Trade Representative's office. The United States is also the top destination for Canadian vacationers, who made 42 million trips to the US in 2017. But relations between these two neighbours have plunged to their lowest in decades. 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.
On the campaign trail this week, Trump continued his attacks on Canadian dairy, wheat and duty-free customs allowances for Canadians returning home, saying they were scuffing up brand new shoes in order to sneak them in. US 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." Freeland took note, saying this was "self-evident." She also repeated that Trump's decision to invoke national security to justify the US tariffs on steel and aluminum imports was "insulting" to Canadian veterans who had stood by their US allies in conflicts dating back to World War I. Canadian steel is used in American tanks, and Canadian aluminum is used in American planes.
The United States has a USD 2 billion trade surplus on iron and steel products with Canada, Freeland also pointed out, and Canada buys more American steel than any other country, accounting for 50 percent of US exports.