The Canadian government needs to decide on a proactive response to U.S. President Donald Trump’s new tariffs on steel and aluminum, according to politicians and industry experts.
“This can cause significant economic damage which will make [fiscal] deficits even bigger,” Conservative party leader Andrew Scheer told CBC Radio’s The House on Friday.
Trump announced new trade restrictions Thursday, including a 25 per cent tariff on steel imports and 10 per cent duty on aluminum, but didn’t say whether Canada would be exempt.
With so much cooperation between the two countries on the defence file, Prime Minister Justin Trudeau said it was “absolutely unacceptable” to highlight Canadian steel or aluminum as a security threat. Trump is justifying the tariffs in part on national security grounds.
The United States imported 26.9 million tonnes of steel in 2017; more than four million tonnes of it, came from Canada.
Canada buys more American steel than any other country, accounting for 50 per cent of U.S. exports, according to the Canadian Steel Producers Association.
Significant damage in a short period of time
Canada is now seeking an exemption and is vowing to retaliate if it’s slapped with any new tariffs, but the new trade restrictions are something Scheer said the government should have anticipated.
“They know that this individual, this government, is far more protectionist and we are at risk.”
The Conservatives, Scheer said, were disappointed that this year’s budget included no concrete plan to deal with growing trade tensions with the United States.
Politicians aren’t the only ones worries about what these tariffs could mean for Canada’s economy.
“This is going to be a scenario that turns quickly, and the harm that can be done to the domestic industry is significant in a very short period of time,” said Joseph Galimberti, president of the Canadian Steel Producers Association.
The tariffs are going to cost Canada jobs and threaten Canadian business investments, he said.
The tariffs also could force other countries to divert their steel away from the U.S. to other markets, threatening Canada’s ability to remain competitive.
Looking to the government to be ‘creative’
To combat the threat, both Scheer and Galimberti said the Liberals need to use the influence they have to try to get through to Trump.
“It’s troubling to see an American administration revert to some of the failed policies of the past that not just discourages growth, but punishes [it],” Scheer said.
The cross-border trade file under Trump — including the NAFTA talks — has been challenging for Canadian government representatives. Adding tariffs to the mix will only make it harder.
“This kind of 25-per-cent-across-the-board tariff is extraordinary and not something that the traditional Canadian policy framework is set up to deal with,” Galimberti said.
“I think we’re going to look to the government to be creative.”
On Friday, CBC News learned Minister of Transport Mark Garneau had spoken to Wilbur Ross, the U.S. secretary of commerce, and Foreign Affairs Minister Chrystia Freeland will be speaking to U.S. trade representative Robert Lighthizer on Monday.
The Prime Minister’s Office has also reached out to the White House in the last 24 hours.