Trudeau Says Canada Does Not Link Trump Tariffs to NAFTA Deal

Steel mills are seen in Hamilton Ont

Steel mills are seen in Hamilton Ont

The steel tariff threat was seen by many to be an attempt by the Trump administration to pressure Canada and Mexico to complete the NAFTA talks - giving in to other USA demands or giving up some of their own -rather than risk the punishing steel and aluminum duties.

"One way of doing that is to put on a tariff, which makes imported goods more expensive and makes it more likely that the domestic firms will be able to continue production", he adds. Quebec is a huge stakeholder, which is why the Prime Minister is visiting. Later this week Trudeau is due to visit the steel town of Hamilton, where workers are on edge. Mexico is also a member nation of the trade deal.

"(We're) highlighting that the imposition of tariffs on Canada would end up hurting the USA nearly as much as it would hurt Canada".

Canada, Mexico and Australia have secured exemptions of some form from the U.S.'s announced tariffs, and other countries and trading blocs (namely the European Union) are lobbying for exemptions of their own.

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Trump and his trade officials have signalled in the past they are looking for more access to Canada's dairy market within a renegotiated NAFTA deal. "While we are grateful that our trading partners, Canada and Mexico, are now exempt, it is our view that these tariffs will quickly become a tax on the fix and maintenance of vehicles, a tax that will ultimately be paid for in higher fix prices by the American auto owner".

The Canadian government has vowed to retaliate if duties are imposed, but the prime minister did not answer directly when asked what measures it might take.

"We are very concerned about the actions taken by China and the dumping of steel and aluminium on the global market", Trudeau said.

Much of the steel imported today comes from friendly countries such as Canada, South Korea, Japan and the United Kingdom, with which the US has strong military alliances.

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But right now, the more pressing issue is the threat of Donald Trump imposing tariffs on Canadian steel and aluminum. He also credited Trump for keeping a promise: he said the president told him at last year's G7 that Canada would get an exemption, and kept his word. Chinese commerce minister Zhong Shan said, "There are no winners in a trade war". He called for a multilateral approach rather than multiple bilateral actions.

Lardy says the tariffs could invite retaliation by other countries.

The Trump administration has set tariffs of 25 per cent on steel and 10 per cent on aluminum, applicable to every country except Canada and Mexico.

Azevedo said he did not know if Brazil would resort to the WTO's dispute resolution mechanism but said Brazil was not ruling it out.

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