Prime Minister Justin Trudeau and Foreign Affairs Minister Chrystia Freeland speak at a press conference in Ottawa on Thursday, May 31, 2018. Canada is imposing dollar-for-dollar tariff "countermeasures" on up to $16.6 billion worth of U.S. imports in response to the American decision to make good on its threat of similar tariffs against Canadian-made steel and aluminum. (Patrick Doyle/THE CANADIAN PRESS)

Canada hits back at U.S. steel and aluminum tariffs with $16.6B countermeasures

Canada is countering “a very bad” move by the Trump administration to slap punishing tariffs on steel and aluminum imports by imposing dollar-for-dollar tariffs of its own on everything on from steel products to playing cards and ball point pens.

Foreign Affairs Minister Chrystia Freeland said Canada is hitting back Washington for its “absurd” action with countermeasures of up to $16.6 billion.

“This is the strongest trade action Canada has taken in the post-war era,” Freeland said. “This is a very strong response, it is a proportionate response, it is perfectly reciprocal. This is a very strong action in response to a very bad U.S. decision.”

These countermeasures will take effect on July 1, 2018 and will remain in place until the U.S. eliminates its trade-restrictive measures against Canada, Freeland said.

She and Prime Minister Justin Trudeau made the announcement at a press conference hours after U.S. Secretary of Commerce Wilbur Ross confirmed the United States is following through on its threat to impose tariffs of 25 per cent on imported steel and 10 per cent on imported aluminum, citing national security interests.

“These tariffs are totally unacceptable,” Trudeau said. “For 150 years, Canada has been America’s most steadfast ally. Canadians have served alongside Americans in two world wars and in Korea. From the beaches of Normandy to the mountains of Afghanistan, we have fought and died together.”

That Canada could be considered a national security threat to the United States is inconceivable, Trudeau said.

“These tariffs will harm industry and workers on both sides of the Canada-U.S. border, disrupting linked supply chains that have made North American steel and aluminum more competitive around the world,” Trudeau said.

“Beyond that, these tariffs are an affront to the long-standing security partnership between Canada and the United States, and in particular, to the thousands of Canadians who have fought and died alongside American comrades-in-arms.”

Setting the stage for an acrimonious G7 summit

U.S. Commerce Secretary Wilbur Ross testifies before a Senate Commerce, Justice, Science, and Related Agencies Subcommittee on Capitol Hill in Washington, U.S., May 10, 2018. (Yuri Gripas/REUTERS)

The U.S. move is also setting the stage for a potentially acrimonious G7 leaders’ summit in Charlevoix, Quebec on June 8 and 9.

“We look forward to continued negotiations, both with Canada and Mexico on the one hand, and with the European Commission on the other hand, because there are other issues that we also need to get resolved,” Ross told reporters on a telephone briefing Thursday morning.

Ross offered little detail about the measure that could potentially spark a trade war with Washington’s top allies and even official spokespeople at the Department of Commerce were unaware of the details of the announcement when contacted by Radio Canada International for comment.

‘Bad day for world trade’

The Mexican government on Thursday said it will retaliate too.

“Mexico strongly rejects any unilateral and protectionist measure that distorts trade in North America,” Deputy Foreign Trade Minister Juan Carlos Baker said on Twitter.

“Mexico has indicated several times that this type of measures based on the criterion of national security are neither adequate nor justified.”

Mexico will impose retaliatory tariffs on various U.S. products such as flat steel, pork and other food items, Baker said.

U.S. Trade Representative Robert Lighthizer and European Trade Commissioner Cecilia Malmstrom take part in a meeting to discuss steel overcapacity, in Brussels, Belgium March 10, 2018. (Stephanie Lecocq/Pool/REUTERS)

Reacting to Ross’s comments on Thursday, President of the European Commission Jean-Claude Juncker said he was concerned by the U.S. decision.

“The EU believes these unilateral U.S. tariffs are unjustified and at odds with World Trade Organisation rules,” Junker said. “This is protectionism, pure and simple.”

European Trade Commissioner Cecilia Malmström said the EU’s response will be proportionate and in accordance with WTO rules.

“Today is a bad day for world trade,” Malmström said. “We did everything to avoid this outcome.”

Throughout these talks, the U.S. has sought to use the threat of trade restrictions as leverage to obtain concessions from the EU, Malmström said.

“This is not the way we do business, and certainly not between longstanding partners, friends and allies,” she said. “We will also impose rebalancing measures and take any necessary steps to protect the EU market from trade diversion caused by these U.S. restrictions.”

With files from CBC News and Reuters

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