Prime Minister Justin Trudeau says he has spoken directly with U.S. President Donald Trump to make clear Canada views the imposition of steep new tariffs on foreign steel and aluminum as “absolutely unacceptable” and that the decision “makes no sense.”
In a press conference with reporters during his post-budget tour Friday, Trudeau touted the equality-focused federal budget but the questions he faced were dominated by concerns about how the government will respond to a plan announced by Trump on Thursday to impose a 25 per cent tariff on foreign steel and a 10 per cent tariff on imported aluminum.
“We regard the implication of any new tariffs as absolutely unacceptable,” Trudeau said. “I have spoken a number of times directly with the president on this issue … highlighting and reminding him of the close security cooperation we have and highlighting this is not something that we want to see.”
The comments from Trudeau came roughly two hours after his finance minister, Bill Morneau, also spoke to media from a stop on his post-budget tour and said little about what concrete steps the government is taking in light of the tariff announcement, which caught businesses by surprise.
Morneau said he had had a phone conversation with the U.S. trade secretary on Thursday but gave little insight into the effects of the move on the ongoing renegotiation of the North American Free Trade Agreement or on how the government plans to avoid to trade war.
He also gave few hints as to whether the government thinks it will be able to secure an exemption from the tariffs for Canadian steel and aluminum producers.
“I’m not going to hypothesize about what might or might not happen,” said Morneau, who’s in Montreal as part of his post-budget tour.
“My job is to protect Canadians, put forward our position and continually try to improve the opportunities we have for business and Canadians.”
The announcement of the tariffs Thursday left Canadian businesses reeling and politicians scrambling to ease fears about the potentially disastrous effects the tariffs could have on Canadian industry.
Of the steel imported each year by the U.S., 16 per cent comes from Canada.
Canada also is the biggest foreign buyer of American steel, and Trudeau said Friday that the effects of the tariffs proposed by Trump would be significant.
“Disruptions to this integrated market would be significant and serious.”
According to the Canadian Steel Producers Association, Canada and the U.S. traded $12 billion worth of “evenly balanced” steel in 2017.
Trump said Friday morning that “trade wars are good” and would be “easy to win” for the U.S.
While some have speculated the intention behind the new tariffs is to target countries like China who Trump have accused of unfair trading practices with the U.S., imports of steel from China to the U.S. are small compared to the steel market between Canada and the U.S.
Both Canada and the U.S. are the top export markets for each other’s steel though, and for weeks officials from both sides of the border as well as businesses have been pushing hard to secure an exemption for Canada from the tariffs.
At the same time, the seventh round of NAFTA negotiations are taking place this week in Mexico City with an eighth and final round in Washington later this month.
The effect of the tariffs on those negotiations is not yet clear but all three parties to the discussions have remained far apart in recent weeks over several key issues and U.S. attempts to insert so-called “poison-pill” provisions into the deal.
Morneau would not speculate on the effect of the tariffs on the ongoing NAFTA talks, however.
“It’s a challenge that we’re facing up to by making sure we come to the table with ideas that can progress our talks and hopefully come to a better conclusion,” he said.
“With every new idea that comes from the United States, I think we have to reinforce the Canadian position. In the case of things like tariffs on steel or aluminum, our point is that we are an important part of the value chain. We’re an important provider of those products and can be very important in making sure that the United States, the United States industry, has access to the kinds of products that they need. We will continue to be diligent in doing that.”
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