It’s official: Canada is not taking Trump’s attacks on its steel and aluminum exports lying down.
On Friday, Canada unveiled the list of US goods that it plans to hit with tariffs, or border taxes, beginning on Sunday. Those goods include steel, aluminum, whiskey, toilet paper, washing machines, and motorboats.
Canada’s latest move is in response to Trump’s sweeping tariffs on Canadian steel and aluminum exports that went into effect at the end of May. And they confirm that even the US’s closest allies will not turn the other cheek as the Trump administration pursues the most aggressive protectionist trade agenda it has in decades.
“We will not escalate — and we will not back down,” Canadian Foreign Minister Chrystia Freeland said on Friday, indicating that Canada wouldn’t exceed the scale of tariffs the US imposed on it.
Canada will tax US steel exports at a rate of 25 percent, and the rest of the goods will be taxed at a 10 percent rate. Altogether, they’re planning to target $12.6 billion worth of American goods, which matches the value of the new US tariffs on Canadian steel and aluminum.
Freeland framed the new trade barriers as a necessary evil to ensure Trump doesn’t think he can push around his neighbor without facing consequences.
“I cannot emphasize enough the regret with which we take these countermeasures,” the foreign minister said. But she added that the only way Canada would consider dropping them is if the US rescinds its new steel and aluminum tariffs.
In the past month, US-Canadian relations have hit their lowest point in recent memory. After the G7 summit in Quebec in early June, Trump blasted Canadian Prime Minister Justin Trudeau after Trudeau pledged to retaliate against the US’s steel and aluminum tariffs. Citing Trudeau’s remarks, and calling the prime minister “meek and mild,” Trump instructed officials to retract US support for a joint statement with the rest of the G7.
But Canada appears to be unswayed by Trump’s antics, at least for the moment. The country’s officials have made the calculation that it’s in their best interest to retaliate, even if that means that Trump might choose to escalate the situation further.
The US’s trading partners are choosing retaliation as a deterrent
Canada’s tariffs will dramatically increase the price of the targeted US goods in Canadian markets, dampening demand for them and hurting the bottom line of the US companies that produce them.
It’s a move that highlights the downside of Trump’s America First trade agenda: When he takes steps to protect one domestic industry from foreign competition, other countries take steps to lash out at other US industries.
China is one good example. The Trump administration announced that it plans to roll out tariffs on $34 billion worth of goods from China on July 6, and China has promised to retaliate against those tariffs with its own tariffs of “the same strength.”
Mexico, which is facing the same steel and aluminum tariffs that affect Canada, has already announced its own retaliation against about $3 billion in US goods, including US pork, steel, cheese, bourbon, apples, and more.
Like China, Mexico didn’t choose the goods it wanted to hit with tariffs randomly. As the New York Times has reported, Mexican officials said they intended to strike at areas tied to top Republicans, including “steel from Vice President Mike Pence’s home state of Indiana, motorboats from Senator Marco Rubio’s Florida, and agricultural products from the California district of Representative Kevin McCarthy, the House majority leader.”
On top of that, Iowa, which has three Republican Congress members, will feel pain from pork tariffs, and Senate Majority Leader Mitch McConnell’s home state of Kentucky could see its bourbon sales decline.
It’s a move that may make Republican politicians sweat as the November elections approach, as the GOP is at serious risk of losing control of at least one chamber of Congress.