Speaking at the artificial intelligence conference in Paris, Canadian Prime Minister Justin Trudeau mentioned that the decision of imposing more tariffs on Canadian steel and aluminum imports is “entirely unjustified” and will attract a response “strongly and firmly” from Canada, whose economy, with the US’ closest ally position, cannot sit idly when its ally uses such unfair tariffs.
Earlier in May, United States President Donald Trump announced plans to impose 25% tax on steel import and 10% on aluminium, citing that the move will protect national security. The latter has attracted considerable criticism from friendly nations such as Canada, European Union, and Mexico, terming the plan as an onslaught on long-held trade relationships that contravenes international trade regulation.
Canada Reactions: Measures of Retaliation
Canadian government has acted in response by announcing measures which include:
Retaliatory tariffs on U.S. steel and aluminum: Canada will retaliate by imposing equivalent tariffs on U.S. steel and aluminum exports.
Duties on a range of other U.S. products: Items such as whiskey, maple syrup, ketchup, and industrial goods will face new Canadian tariffs worth $16.6 billion.
Effective Date: These retaliatory measures are expected to come into effect on July 1.
Legal Action: Canada Takes the Case to the WTO
The country of Canada has filed the formal complaint with the World Trade Organization (WTO). It argues that the U.S. tariffs are illegal under international law. According to Foreign Minister Chrystia Freeland, the tariffs imposed on the pretext of national security violate WTO rules and all international trade agreements.
Impact on Both Countries Economies
The warfare in the trading field will certainly have serious effects on economics:
Effects on U.S. Workers and Industries: American firms that use Canadian steel and aluminum, including car manufacturers and building companies, may experience increased prices.
Impact on Canadian Steel Manufacturers: The association of Canadian steel producers has also condemned the imposition of tariffs by the United States, threatening potential disruptions and economic distress.
Reaction from Other Nations: The European Union and Mexico have also imposed retaliatory measures, which will further fuel a trade war.
Trudeau’s Call for Negotiation
While tensions are heightened, Trudeau has suggested Canada will work with the U.S. administration to draw attention to the harm both countries are facing under the new tariffs and to encourage the U.S. to reconsider its position and negotiate constructively on trade.
The ongoing trade dispute between Canada and the U.S. marks a significant challenge for North American economic relations. With retaliatory tariffs set to take effect and legal battles underway at the WTO, the coming months will be critical in determining whether the two nations can reach a resolution or if tensions will escalate further.
