Canada’s trade tariffs against the US have come into effect. Following the celebration of its national day on July 1, 2018, Canada imposed a 25% tariff on assorted US metal products as well as a 10% tariff on 250 US goods such as beer kegs, whiskey and orange juice. According to senior Canadian officials, the list is designed to exert political pressure on the US and make it take notice of how this will affect trade.
The trade tension between the two neighbours are at an all time high amid the North American Free Agreement talks. BBC reports that the value of the duties amounts to around US$12bn – representing the 2017 value of Canadian metal exports affected by US measures.
Canadian officials have called the steel and aluminium levies against Canada, the EU and Mexico imposed a month ago by the Trump administration “illegal” and “unjustified”. On Friday, Canada also announced it would make US$1.5bn available to defend the steel and aluminium industry, including funds to support affected businesses. “Our approach is and will be this: we will not escalate and we will not back down,” Foreign Minister Chrystia Freeland said while announcing the funds.
The EU and Mexico have already imposed their own counter-tariffs on American goods. EU’s duties on £2.4bn ($3.1bn) of products such as bourbon whiskey, motorcycles and orange juice took effect on 22 June. Mexico put tariffs on $3bn worth of American products ranging from steel to blueberries and bourbon.
The tariffs, which provoked international outrage, have also triggered complaints against the US to the World Trade Organization (WTO) and to North American Free Trade (Nafta) dispute panels.
These tariffs are followed by the strained relations between the US and Canada, after Canadian PM Justin Trudeau said his country would not be pushed around by Americans on trade. Beyond Nafta and the metals levies, there have been disputes over issues such as lumber, dairy and wine. In May, Trump ordered a national security probe into vehicle imports, which could bring tariffs on autos and auto parts.