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US-ally trade wars

Shots fired in the US-Canada trade war a tariffs on US$12.6 billion of American goods kick in

PUBLISHED : Monday, 02 July, 2018, 5:05am
UPDATED : Monday, 02 July, 2018, 5:05am

Canada began imposing tariffs Sunday on US$12.6 billion in US goods as retaliation for the Trump administration’s new taxes on steel and aluminium imported to the United States.

Some US products, mostly steel and iron, face 25 per cent tariffs, the same penalty the United States slapped on imported steel at the end of May.

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Other US imports, from ketchup to pizza to dishwasher detergent, will face a 10 per cent tariff at the Canadian border, the same as America’s tax on imported aluminium.

Trump had enraged Canada and other US allies by declaring imported steel and aluminium a threat to America’s national security and therefore a legitimate target for US tariffs. Canada is the United States’ second-biggest trading partner in goods, just behind China.

Speaking Sunday in Leamington, Ontario, Prime Minister Justin Trudeau thanked Canadians for standing united against President Donald Trump’s sanctions. He urged Canadians to “make their choices accordingly” in considering whether to buy American products.

The selection of Leamington, known as Canada’s tomato capital, was no accident.

‘We will not back down’: Canada strikes back at US US$12.6 billion tariffs

The town is home to a food-processing plant that supplies tomato paste and other products to French’s, a major competitor of Kraft Heinz. Heinz left Canada and sold its Leamington plant in 2014, after 105 years of Canadian operations.

The new Canadian tariffs, which took effect at 12.01am on Sunday, are hitting a long list of US consumer goods, including ketchup and other Kraft Heinz products.

As part of his combative America First approach, Trump has repeatedly attacked the trade policies of the United States’ northern neighbour.

He has cired Canada’s triple-digit tariffs on dairy products, which account for only about 0.1 per cent of US-Canada trade. The United States, in fact, last year enjoyed a US$2.8 billion overall trade surplus with Canada.

‘We will not back down’: Canada strikes back at US US$12.6 billion tariffs

Trump has also tried to pressure Canada and Mexico into agreeing to rewrite the 24-year-old North American Free Trade Agreement to shift more auto production and investment to the United States.

But that effort has stalled, and Trump said Sunday that he didn’t expect a deal that he could support until after the US midterm elections in November.