Ottawa files trade challenges over US steel and aluminum tariffs
Fri., June 1, 2018
OTTAWAâ"Canada formally filed two complaints Friday that its best friend, neighbour, trading partner and defence ally, the United States, was an international trade scofflaw.
Right up to the last hours before Donald Trumpâs announcement Thursday, Canadaâs prime minister and his top advisers on the NAFTA file didnât know whether the U.S. president would really proceed with his threat to slap tariffs on this country.
Should they take his June 1 deadline seriously?
Trump had changed his mind twice before. Each time it went down to the wire, a reprieve coming just hours before tariffs were to take effect.
Canada â" along with the European Union and Mexico â" had been exempted in early March, when Trump first moved against Americaâs global competitors with an eye on boosting domestic manufacturers. Another extension was granted in April.Article Continued Below
Trump had imposed a 25 per cent tariff on steel and a 10 per cent tariff on aluminum imports on countries ranging from allies like Australia to nations he views as unfair traders, like China. Using a little-known provision from a 1962 trade law, Trump cited U.S. national security interests to curb imports, and in the process, t rade lawyers said, thumbed his nose at widely understood international trade rules within the World Trade Organization.
In Canadaâs case, Trump and his officials had made clear it was because little progress was being made at the NAFTA table.
âI love Canada,â Trump says after lashing back at Canada over Trudeauâs tariff criticism
From auto manufacturing to bourbon: How Canadians could see price increases because of Trump, Trudeau tariffs
Opinion | HÃ©bert: A defining week for Justin Trudeau
Foreign Affairs Minister Chrystia Freeland said officials had been working on Canadaâs retaliation list âfor weeks.âArticle Continued Below
In fact, after Trump fired his first warning shot, experts in the departments of Finance, Global Affairs, and Innovation, Science and Economic Development began secretly drafting Canadaâs list of countermeasures to exert maximum pressure on key American congressional distr icts and power-brokers in Congress.
The government had conducted a savvy, yearlong NAFTA outreach effort to consult industry and union stakeholders, as well as important Opposition opinion-shapers like former interim Conservative leader Rona Ambrose and cabinet minister James Moore â" but now, Ottawa could not afford to consult anyone on the list, keeping the retaliation plan in its back pocket.
It was a week that tested Trudeauâs own positions on two high-profile and high-stakes issues.
The Liberal leader who vowed to end federal subsidies of the fossil fuel industry, and who once mused about the need to âphase outâ the oilsands, announced plans to buy an oil pipeline.
Then Trudeau, who went into office pledging to repair diplomatic rifts and who had won a measure of respect in the White House for his diplomatic dealings with Trump, found himself in the position of unleashing Canadaâs toughest trade action in the postwar period â" on a neighbour a nd Ottawaâs closest ally.
Both are monumental decisions. And both promise to have significant, though still uncertain, impacts on the countryâs economy and his government.
Trudeau personally called the premiers of the provinces at the heart of each move: B.C. and Alberta, in the case of the Trans Mountain pipeline purchase, and Ontario, Quebec and Saskatchewan on trade tariffs. He reached out as well to brief opposition party leaders Andrew Scheer and Jagmeet Singh.
The Conservative leader, Scheer, was quick on Thursday to fault Trudeau in the trade battle, declaring that the prime minister had âfailedâ Canadian steel and aluminum workers. Conservative MPs took the same tack in Fridayâs question period.
But other prominent Conservatives pointedly broke ranks and voiced support for the Liberal governmentâs response.
âWe must defend our economy and hit back,â Rona Ambrose, the former Conservative leader, said on Twitter.
âWhen Cana da is under attack, we unite. Country first,â former cabinet minister James Moore tweeted, calling the governmentâs actions âmeasured and appropriate.â
Freeland singled out some of those voices, along with those of union leaders, as she claimed broad support for Canadaâs retaliatory response.
âThis is a moment when it is important for us to be clear and firm,â she said.
But uncertain days lie ahead, said Roland Paris, professor of international affairs at the University of Ottawa, who served as Trudeauâs senior adviser on global affairs and defence.
Uncertainty over the NAFTA negotiations, worries about further trade action that could target Canadaâs auto sector, and, above all, a president who seems less restrained in his actions and rhetoric create a troubling picture for Canada, Paris said.
âHeâs previously said that trade wars are easy to win,â Paris said, referring to Trump. âWell, heâs putting that proposition to the te st and weâll see how much ground is scorched in the meantime.â
Trudeauâs challenge with Trump has always been to strike a balance between defending Canadian interests and avoiding an escalation of tensions, Paris said.
âI think the balance point has shifted but I think his approach to dealing with the Trump administration will continue to be careful and calibrated,â he said.
He cited Canadaâs response to the U.S. tariffs, calling the dollar-for-dollar action âcommensurate.â
âI think thatâs part of not wanting to escalate these tensions any further, not rise to the bait of Trumpâs various tweets,â Paris said, adding that it is âprofoundlyâ in Canadaâs interests to keep the trade spat from spiralling further.
He said the trade measures announced by Washington are likely part of a larger gambit by Trump to exact trade concessions from Canada and the other nations, and the president cares less about the diplomatic carnage it m ight create.
âPrevious presidents would have been more restrained at the risk of doing serious damage to these relationships or to the international trading system,â Paris said.
âThe worse-case scenario for most presidents doesnât seem that bad for him.â
If there is a silver lining, Trumpâs seeming mercurial nature means that he could just as quickly call a truce in the trade war.
âHe can overnight shift from being adversarial to friendly,â Paris said.Read more about: TOP STORIES, DELIVERED TO YOUR INBOX.NEW NEWSLETTERHEADLINESSIGN UPSource: Google News