The Canadian government has officially lifted its tariffs on U.S. steel, aluminum and other products after reaching a deal to end the nearly year-long trade war.
The counter-tariffs have raised about $1.27-billion since last July, the federal government said, and all of it will go to the Canadian steel and aluminum industry. Prime Minister Justin Trudeau had promised $2-billion last summer to support the industry, and last week said the financial assistance will still be there.
Finance Minister Bill Morneau announced on Monday that $16-billion worth of retaliatory countermeasures against U.S. products such as bourbon and trading cards have been lifted after the United States, Canada and Mexico reached a deal on Friday to lift the Trump administration’s steel and aluminum tariffs.
“The removal of tariffs and countermeasures is a true win-win for everyone involved, and great news for Canadian and American workers, for our communities and our economies,” Mr. Morneau said in a statement.
Under the terms of the deal, U.S. President Donald Trump agreed to end his metal tariffs within two days, which he formally did on Sunday night. Canada and Mexico said they would cancel their retaliatory levies and all World Trade Organization litigation related to the fight will end.
Mr. Trump imposed the tariffs of 25 per cent on steel and 10 per cent on aluminum on June 1 of last year. He used an obscure provision of U.S. trade law, called Section 232, that allows tariffs to be imposed for “national security” purposes; Canada and Mexico repeatedly criticized this as an abuse of the law because they are American allies.
In a tweet on Sunday, Mr. Trump celebrated the deal but did not mention it was his own metal tariffs that triggered the trade war.
“Starting Monday, our great Farmers can begin doing business again with Mexico and Canada. They have both taken the tariff penalties off of your great agricultural product. Please be sure that you are treated fairly,” Mr. Trump wrote, adding that any complaints should be addressed to U.S. Agriculture Secretary Sonny Perdue.
Canada’s retaliatory tariffs slapped extra import duties on aluminum and steel coming from the United States but also 75 other products including sleeping bags, toilet paper, soy sauce and ketchup.
In exchange for the trade peace, Canada and Mexico agreed to help the Trump administration crackdown on steel and aluminum from China and other overseas countries that are shipped to the United States through Canada and Mexico to get around U.S. tariffs. The countries will monitor exports and, if there is a “surge” of any steel or aluminum products to the United States, the United States can reimpose tariffs on that product.
In his proclamation ending the tariffs on Sunday, Mr. Trump said the U.S. has agreed to measures with Canada and Mexico to prevent imported steel and aluminum that are “unfairly subsidized” or sold at dumped prices. “These measures are expected to allow imports of steel articles from Canada and Mexico to remain stable at historical levels without meaningful increases,” it says.
The countries will also work on new rules meant to increase the amount of North American materials used in steel and aluminum in order to discourage Canadian and Mexican firms from importing Chinese scrap, melting it down and exporting the product to the United States.
With a report from Canadian Press