(AFP) – Canada on Tuesday announced counter-tariffs on US goods ranging between 15 and 50 percent, intensifying the trade war between the historically close allies. Ottawa’s retaliation will take effect September 8, a timeframe earlier outlined by Prime Minister Mark Carney after US President Donald Trump’s 50-percent duties came into place Saturday. The retaliatory tariffs of 15 percent, 25 percent, or 50 percent match US levels, said Canada’s Finance Minister Francois-Philippe Champagne. They impact industries including steel, dairy, and electronics. The list includes frozen and fresh fish, consumer goods like dishwashers and washing machines, as well as industrial products including railway construction materials.
Canada’s government also announced a $5.4 billion (CA$7.5 billion) aid package for firms and workers. “This is an unprecedented challenge imposed on Canada. But Canada will meet the moment,” Champagne added. “I think what Canadians can see this morning is that we stand united.” Industry Minister Melanie Joly echoed Champagne’s call for Canadians to support local businesses, vowing to work with new allies and trading partners. She also pledged to “fight back” if Trump raised US tariffs on Canadian autos to 50 percent.
– Tit-for-tat? – Trump’s latest tariffs hit about $20 billion in Canadian goods — or 5.5 percent of its exports to the United States — after trade negotiations collapsed at the eleventh hour. Under Canada’s planned response, US steel and aluminum products previously subject to a 25-percent duty will soon face 50-percent tariffs. Goods facing 25-percent tariffs include appliances, dairy products like cheese, as well as certain steel and aluminum derivative products. A small category will see a 15-percent duty, including electric equipment and tools. These form about 7.3 percent of Canada’s imports from the United States at 2024 levels.
But analysts warn of tit-for-tat escalation. Already on Monday, Trump pledged to double tariffs on Canadian autos starting 2027, up to 50 percent from the current 25 percent for non-US content. Ontario Premier Doug Ford criticized Trump’s threat, saying he could “kiss my ass” and threatening an electricity export surcharge. Trump lashed out at Ford and also referred to Carney as a “governor,” re-upping his inflammatory push for Canada to become the 51st US state. Highlighting the animosity, Trump said Tuesday he was considering renaming Lake Ontario as “Lake America.”
The fresh US tariffs do not exempt products under the US-Mexico-Canada free trade agreement. They raise the US effective tariff rate on Canadian exports to 6.9 percent from 5.1 percent, Oxford Economics estimates. Tariffs on plastics, electrical machinery, and wood and paper products contribute most to the increase. “Manufacturers in Quebec, New Brunswick, and Ontario will be affected the most,” Oxford Economics said.
– Threats to culture – The exchanges drew some concern in the United States. Ethan Johnson, 25, who runs a start-up, told AFP: “The economics and the math behind it do not make sense.” But 29-year-old electrician Lucas Feser trusts the Trump administration “to set up a harder, better deal.” Carney previously said US negotiators sought restrictions on Canadian trade deals with other countries at the last minute. US officials made unacceptable “threats” to the French language and “Quebec culture” too, he added, referring to eastern Canada’s French-speaking province.
Trump pushed back Tuesday, saying on Truth Social that he would “never interfere with Canadians speaking French.” He accused Carney of lying for political support. The United States is Canada’s biggest trading partner. Canadian exports to its neighbor represent 70 percent of its overall total. Canada is the second-biggest US trading partner in goods this year, behind Mexico. Polling released Sunday by the Angus Reid Institute showed Canadians broadly support Carney’s move to walk away from talks, but some fear economic repercussions. The White House had alleged “discriminatory treatment” by Canada against US alcohol, automobile and dairy products in rolling out new tariffs.
– Levy Marquis with Beiyi Seow in Washington and Fanny Alarcon in Montreal
© 2024 AFP
