Canada seeks exemption to Trump’s steel tariffs vows retaliation

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Canada is seeking an exemption to new U.S. trade restrictions on aluminum and steel, and is vowing to retaliate if slapped with any new tariffs.

A government official said Canada believes any new tariffs should not apply due to the highly integrated nature of the North American steel market, and because of the close cooperation between the two countries on defence issues.

Canada’s next steps would be discussed after a final decision from U.S. President Donald Trump, expected next week. For now, officials continue to make Canada’s case “at every possible level,” the official said.

Finance Minister Bill Morneau said today he spoke with his U.S. Treasury Secretary Steve Mnuchin yesterday.

“With every new idea that comes from the United States, we have to reinforce our Canadian position. In the case of tariffs on things like steel or aluminum, our point is that we are an important part of the value chain, we’re an important provider of those products and can be very important in making sure the United States industry has access to the kind of products they need.”

But Morneau declined to predict if the situation could erupt into a trade war.

“I’m not going to hypothesize on what might or might not happen. Our job is to protect Canadians, to put forward our position and to continually try to improve the opportunity set for businesses and Canadians,” he said during a post-budget event in Montreal.

‘Absolutely unacceptable’
Foreign Affairs Minister Chrystia Freeland issued a statement Thursday, insisting any U.S. tariff on steel and aluminum imposed on Canada would be “absolutely unacceptable.”

“It is entirely inappropriate to view any trade with Canada as a national security threat to the United States. We will always stand up for Canadian workers and Canadian businesses,” Freeland said. “Should restrictions be imposed on Canadian steel and aluminum products, Canada will take responsive measures to defend its trade interests and workers.”

When Trump unveiled the tariffs Thursday, he did not specify if Canada and Mexico would be exempt. He announced a major new 25 per cent tariff on steel imports and a 10 per cent duty on aluminum.

Today, he took to Twitter to say the move is necessary to protect the U.S. and its workers because the steel industry is “in bad shape.”

Freeland stressed that Canada is the biggest customer of American steel, as well as a longstanding NORAD and NATO ally.

The new trade dispute comes as Canada, U.S. and Mexico continue talks to renegotiate the North American Free Trade Agreement (NAFTA).

Unifor, the union representing 40,000 auto industry workers and thousands more in the steel and aluminum sectors, said if Canada doesn’t get an exemption from the “punitive” tariffs, the Canadian government should withdraw from NAFTA talks.

“If America imposes duties on steel and aluminum and Canada doesn’t walk away from NAFTA immediately, then make no mistake we will no longer be negotiating, we’ll be capitulating,” said Unifor national president Jerry Dias in a statement.