Prime Minister Justin Trudeau makes remarks during a pro-Israel rally at the Soloway Jewish Community Centre in Ottawa, Ontario, Canada October 9, 2023. REUTERS/Blair Gable
By Isaac Teo
Prime Minister Justin Trudeau says tariffs imposed by Washington on Canadian goods will backfire and “inevitably hurt American workers.”
“The interconnectedness between the supply chains in Canada and the United States, the reliableness of Canada as a partner to so many and so much of the American economy, means that tariffs or thickening of the border between Canada and the U.S. will inevitably hurt American workers, American jobs as well,” Trudeau said at a press conference in Vancouver on Nov. 8.
The prime minister was responding to a reporter who asked what his government has learned about responding to American trade policy, citing the tariffs on Canadian softwood lumber as an example.
In August, the U.S. Department of Commerce announced its decision to increase import duties on Canadian softwood lumber from 8.05 percent to 14.54 percent. The decision resulted from the department’s fifth annual review of these imports to determine whether they were being dumped (sold at less than fair value) or being unfairly subsidized. Ottawa responded in September by launching two legal challenges under the Canada-United States-Mexico Agreement to contest the duties.
With Donald Trump re-elected as U.S. president in the Nov. 5 election, Trudeau said he is aware of Trump’s emphasis on supporting American jobs and “moving forward in ways that are going to benefit people in his country.”
‘Ready to Tackle’
Trump has proposed a 10 percent tariff on all imports to the United States and 60 percent on Chinese-made goods. In 2018, during his first term, Washington had slapped tariffs on Canadian steel and aluminum, leading to retaliation from Ottawa. The two parties reached a deal on the issue almost a year later.
A recent analysis from TD Economics said that the proposed across-the-board tariffs of 10 percent, assuming retaliation by Canada on U.S. imports, would result in the Canadian economy being “hit hard,” with real GDP falling around 2.4 percentage points over two years.
However, the report added that since the move would also hurt the U.S. economy, it’s unlikely that broad-based tariffs would be imposed on America’s northern neighbour.
“We are optimistic that Canada will ultimately avoid blanket tariffs,” wrote TD economist Marco Ercolao in his report published on Oct. 24. “The likelihood that tariffs drag down the U.S. economy, disrupt supply chains, and stoke inflation are enough of a reason to forgo tariffs on Canada.”
Trudeau said his government will ensure Trump’s policies to protect American jobs can be done in partnership with Canada. He cited how Ottawa had faced challenges from the Biden administration on various issues, such as electric vehicles, but was able to resolve them through “very deliberate and concerted approaches.”
“Right now, standing up once again, the Canada-U.S. Committee is a sign that we are ready to tackle some of the new challenges that no doubt the new American administration will put on the table for countries around the world, that Canada will be ready to handle,” Trudeau said at the press conference.
‘In Alignment’
The Cabinet Committee on Canada-U.S. Relations was created by Trudeau after Trump took office the first time in 2017. It went dormant during President Joe Biden’s term but was revived a little more than 24 hours after Trump’s win was secured.
The revived committee, made up of Liberal cabinet ministers, is chaired by Deputy Prime Minister and Finance Minister Chrystia Freeland and vice-chaired by Public Safety Minister Dominic LeBlanc. It was re-established in response to the “urgent issue” of Trump’s victory, Freeland said.
“The idea is that it will operate in the way that the COVID committee operated, bringing together ministers to address, in a working fashion, an urgent issue,” she told reporters at a press conference on Parliament Hill in Ottawa on Nov. 8.
Trudeau said Canada is aligned with the United States when it comes to protecting jobs from China.
“We brought in 100 percent tariffs on Chinese-made electric vehicles. We brought in 25 percent tariffs on steel and aluminum to protect our steel and aluminum workers from Chinese over-capacity. These are things that we are doing to protect our market, protect Canadian jobs, but also do it in alignment with the United States,” the prime minister said.
“There’s an awful lot Canada and the U.S. are going to be able to do together to successfully compete with the world.”