Just the Facts

Five Facts on Canada's Tariffs

By No Labels
July 2, 2018 | Blog

On Sunday, Canada announced retaliatory tariffs against the U.S.  While the tariffs were heavily focused on U.S. exports of steel and aluminum, they also targeted hundreds of other consumer goods, including ballpoint pens and inflatable boats.  It’s the latest development in a trade dispute that has broken out between the U.S. and Canada and here are five facts that you should know:

The Canadian tariffs were announced in response to American tariffs that were imposed in early June

On May 31, President Trump announced his intention to impose tariffs on steel and aluminum imports from a variety of countries, including Canada.  The move drew criticism from both parties, as members of Congress worried about both the economic and political consequences of going head to head with a close ally.  However, the Trump administration has argued that the tariffs are a necessary measure designed to put pressure on trading partners and secure better long-term trade deals for the United States

Canada’s 25% tariff on U.S. steel and iron imports is the same duty that the United States placed on Canadian steel in May

This is significant, as US steel makes up 60% of Canada’s steel imports– equivalent to 1.2 million metric tons. Chrystia Freeland, Canada’s Foreign Minister, warned that Canada “will not escalate – and will not back down.” She also asserted the measures will remain in place until the US eliminates its tariffs on Canadian steel and aluminum.

Canada also levied a 10% tariff on aluminum and several other consumer goods—including ketchup, whiskey, toilet paper, and maple syrup

Many of Canada’s tariffs focused on products produced by Kraft Heinz, which left Canada in 2014 after 105 years in the country. When combined with the steel tariffs, Canada’s new duties will affect $12.6 billion of U.S. goods. This equals the value of the recent tariffs imposed on Canada by the US in late May and early June.

While President Trump maintains confidence in his tactics, numerous lawmakers and organizations have criticized his use of tariffs

President Trump has not showed any signs of backing down.  On Sunday, following the announcement of Canada’s new tariffs, he stated “it’s all going to work out.” However, congressional Republicans have been openly criticizing the president over the trade dispute with Canada. Speaker Paul Ryan (R-WI) stated that, “There are better ways to help American workers and consumers.” In addition, Kevin Brady (R-TX) called on “the administration to continue the exemptions and negotiations with these important national security partners to find a solution and address the damage caused to American exporters.”  In addition,  the U.S. Chamber of Commerce, a traditionally ally of the Republican party, begun a campaign to end the use of tariffs.

President Trump has threatened to impose global auto tariffs next

The Trump administration has been reviewing a proposal to impose 20% tariffs on imported vehicles from across the globe, including those from Canada. CBC News reported that auto tariffs would cause the most severe damage to Canada’s economy to date. Due to the integrated nature of vehicle manufacturing, up to 1.8 million people could be affected.  However, Trump’s proposal has received pushback from both American companies and Republican members of Congress.

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