Economic News

Canada Imposes Retaliatory Tariffs on U.S. Goods

When it was first announced that the United States would no longer make exceptions to recently-imposed steel and aluminum tariffs for allies, many immediately promised retaliation. On Sunday — Canada Day, incidentally — our neighbors to the north made good on that by not only enacting new 25% tariffs on steel and aluminum but also introducing 10% taxes on various other American goods such as whiskey, toilet paper, ballpoint pens, and more. In total, the tariffs are worth $12.5 billion according to CNN Money.

Last Friday, Canada’s Department of Finance released a full list of U.S. items that would receive new tariffs, titling the document “Countermeasures in Response to Unjustified Tariffs on Canadian Steel and Aluminum Products.” Around the same time, Canadian Foreign Affairs Minister Chrystia Freeland spoke out about the move, saying, “The U.S. tariffs leave Canada no choice but to defend our industries our workers and our communities. The solution to this unprecedented dispute is for the United States to rescind its tariffs on Canadian steel and aluminum, which do not pose any kind of security threat to the United States.” Then, in an address to his country on its 151st birthday, Prime Minister Justin Trudeau acknowledged the tariffs and tensions with America, asking Canadians to “make their choices accordingly” when it comes to buying U.S. goods.

Canada’s tariffs are just the latest development it an on-going string of trade-related news. Last week the European Union enacted its retaliatory measures, which included 25% taxes on many quintessentially American products such as motorcycles, bourbon, and denim. As a result of these tariffs, the famed Harley-Davidson Inc. announced plans to move some of its motorcycle production overseas to avoid the EU’s taxes — a move which drew the ire of the Commander in Chief.

Of course there’s plenty more trade brewing as well. This includes rumors that President Trump is considering essentially pulling out of the World Trade Organization. A reported bill titled “United States Fair and Reciprocal Tariff Act” (or “U.S. FART Act,” as some have noted) is said to abandon key WTO principals and give the President the ability to negotiate with countries one-on-one. Elsewhere the administration is reportedly still investigating a possible auto import tariff, with the E.U. already warning of retaliatory measures.

Clearly it may be a while before the full effects of Canada’s tariffs may be felt by American companies. Meanwhile the markets have continued on their rocky road as fears of potential trade wars aren’t being assuaged. Because of this, even with major political stories such as the vacancy on the Supreme Court currently dominating headlines, expect a number trade-related stories to continually pop up in the weeks ahead.

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