Chrystia Freeland, Canada’s foreign minister, said Ottawa will slap tariffs on $12.6 billion of U.S. exports starting tomorrow.
“We will not escalate, and we will not back down,” Freeland said.
Freeland said she spoke six times this week to U.S. Trade Representative Robert Lighthizer about how to resolve the dispute over the impending tariffs that will hit a wide range of U.S. products.
She said she remains confident that “common sense will prevail.”
Freeland called the U.S. tariffs being imposed for national security reasons as “not only absurd, it’s hurtful.”
In March, Trump announced tariffs of 25 percent steel imports and 10 percent on aluminium over national security concerns. He had exempted allies such as Canada and the European Union while talks continued with the leaders of those nations about a permanent waiver.
“Canada has no choice but to retaliate with a measured, perfectly reciprocal dollar-for-dollar response,” Freeland said during remarks in Ontario.
But at the end of May, Trump said that Canada and the EU would be swept into the tariffs, setting off a series of tit-for-tat tariffs by close U.S. trading partners.
“The tariffs introduced by the United States on Canadian steel and aluminium are protectionist and illegal under [World Trade Organisation] and [North American Free Trade Agreement] rules, the very rules that the United States helped to write,” Freeland said.
“It is with regret that we take these countermeasures, but the U.S. tariffs leave Canada no choice but to defend our industries, our workers and our communities, and we will remain firm in doing so,” she said.
Canada, which buys more American steel than any other country, said that the U.S. has a $2 billion annual trade surplus in iron and steel products with Canada.
The U.S., Canada and Mexico are expected to restart talks on the NAFTA after Mexico’s presidential elections, which are set for Sunday.
Canadian steel is used in American tanks, and its aluminium goes into U.S. planes.
In 2017, about $14 billion of steel was traded between Canada and the United States.
Combined trade in aluminium between Canada and the U.S. is more than $11.4 billion a year.
The Canadian government also announced that it would make available upward of $2 billion in assistance to its steel and aluminium companies.
That amount includes $50 million over five years to help companies diversify markets and take advantage of EU and Asia-Pacific trade deals.
Canada says it has already taken steps to address any dumping of metals into its market.
