Steel industry, feds dismiss call to drop retaliatory tariffs
A call from Ontario to drop retaliatory tariffs against the United States has been rejected by the Canadian government and industry leaders, with steelmakers saying the move would spell “disaster” for domestic firms. Ontario’s Economic Development Minister Todd Smith called Monday for the tariffs to be dropped, arguing the trade war between Canada and the U.S. is hurting workers and industries on both sides of the border. Lifting the Canadian government’s $16.6-billion in levies on American goods could prompt Washington to remove its own levies on Canadian steel and aluminum imports, he suggested. The idea received a swift dismissal from the Trudeau administration, with Federal Economic Development Minister Navdeep Bains saying it “would equal unilateral surrender to the Americans.” “The reciprocal tariffs are critical to pressuring the Americans to end this dispute once and for all,” he said in a statement. Canada has been trying to convince U.S. officials to lift tariffs on Canadian steel and aluminum imports since they were imposed on June 1. Though U.S. President Donald Trump initially tied their removal to the negotiation of a revised North American Free Trade Agreement — now signed by all three countries and awaiting ratification — his administration has so far refused to lift them. Scrapping Canada’s countermeasures without first locking in a guarantee from the U.S. on Canadian imports would be “a disaster” for the domestic industry, said Catherine Cobden, president of the Canadian Steel Producers Association. “Until the U.S. lifts their tariffs, we need those retaliatory tariffs in place to protect our industry and our jobs,” said Cobden, who represents Ontario-based steel giants ArcelorMittal Dofasco, Stelco and Algoma Steel. “It would be wonderful if our governments could work together to find resolution to this issue.”
Political pressure for removing the steel and aluminum tariffs has been building in the U.S., with prominent Democrats and Republicans suggesting passage of the revamped NAFTA won’t happen as long as the levies are in place. American business associations have also been lobbying for their removal, arguing the countermeasures are boosting costs for domestic firms.
“We are gaining more and more support in Congress and if we lift our retaliatory tariffs now we lose all of that leverage,” said Jean Simard, president of the Aluminum Association of Canada. “This is the wrong move at the wrong moment.” Smith and Quebec Economy and Innovation Minister Pierre Fitzgibbon sent a letter on Monday to Finance Minister Bill Morneau calling on the feds to secure the permanent removal of all tariffs on Canadian steel and aluminum. Ontario Premier Doug Ford has suggested that Canada’s tariffs should be dropped first, Smith said, though he admitted there is no indication this would lead the U.S. to remove its tariffs in turn.