Canada Threatens to Increase Tariffs on US Steel if Trade Talks Fail

Strategic Insights -

Canadian Prime Minister Justin Trudeau announced a new package of measures to counter the US tariffs on steel and aluminium imports, including a ban on Canadian government products using US steel unless the US offers tariff-free access to Canadian steel. Trudeau also stated that Canada would raise its counter-tariffs on US steel and aluminium products if a deal is not reached within 30 days. The move comes after US President Donald Trump imposed tariffs on imported steel and aluminium, including a 25pc tariff on all imported steel and aluminium, and weeks after he raised them to 50pc.

Key Takeaways:

  • Canadian Prime Minister Justin Trudeau has threatened to increase tariffs on US steel if trade talks with President Trump fail.
  • Canada will raise its counter-tariffs on US steel and aluminium products to levels consistent with the progress made in trade negotiations.
  • Trudeau announced plans to ban Canadian government products from using US steel unless the US offers tariff-free access to Canadian steel.
  • The measures are a response to the US tariffs on imported steel and aluminium, including a 25pc tariff on all imported steel and aluminium, and weeks after Trump raised them to 50pc.
  • The move comes after repeated attacks on the US-Canadian relationship by Trump, including calling for Canada to become America's 51st state.
  • Trudeau said he wants to "reinforce" Canada's strength in negotiations with the US president as he announced a sweeping package of measures aimed at hurting American exports.
  • Trudeau stated that Canada will adjust its existing counter-tariffs on US steel and aluminium products on June 21, at the end of the 30-day period.
  • The US tariffs on imported steel and aluminium are especially punishing for Canada, as it is the largest supplier of foreign steel and aluminium to US markets.
  • Leaders at the G7 summit in Canada pushed Trump to back away from his punishing trade war.

Statistics:

  • 25% tariff imposed by US President Trump on all imported steel and aluminium.
  • 50% tariff imposed by Trump on US steel and aluminium imports.
  • 30-day period for trade negotiations between Canada and the US.
  • 51st state: Trump's repeated calls for Canada to become America's 51st state.
  • 25pc tariff on all imported steel and aluminium: the existing tariff imposed by Trump.
  • $X billion: estimated economic impact of the trade tariffs on Canada's economy.
  • $Y billion: estimated economic impact of the trade tariffs on the US economy.

Sources:

  • The Canadian Press via AP
  • Patrick Doyle
  • Suzanne Plunkett/PA Wire
  • G7 summit in Canada on Monday
  • February announcement by the White House on US tariffs on Canada
  • November election of US President Donald Trump
  • Bank of England
  • Justin Trudeau's announcement on June 21