Long-awaited end to Canada’s tariff standoff with U.S. finally at hand

Chrystia Freeland, Justin Trudeau and others have branded the tariffs as illegal, absurd and insulting

Canada’s year-long standoff with the Trump administration over punitive U.S. steel and aluminum tariffs is finally over, removing a key hurdle in efforts to ratify the new North American trade pact.

Global Affairs Canada says the tariffs will be removed within two days.

Canada has also agreed to drop all of its retaliatory measures and legal actions at the World Trade Organization.

Prime Minister Justin Trudeau is making an unscheduled, last-minute trip to Hamilton, Canada’s steel-manufacturing capital, where he’s expected to confirm the breakthrough at an event at steel giant Stelco with Foreign Affairs Minister Chrystia Freeland and Finance Minister Bill Morneau.

READ MORE: U.S. tariffs on steel, aluminum could be gone in weeks, ambassador says

ALSO READ: 5 of the weirdest items affected by the Canada-U.S. trade war

Word of the agreement began to trickle out amid reports that U.S. negotiators had backed off long-standing demands for a hard limit on imports of Canadian steel and aluminum, part of an effort to keep cheap Chinese product out of the country.

Late Friday morning, President Donald Trump and Trudeau wrapped up their third phone call in less than a week on the tariff dispute, which includes Canada’s decision to retaliate with more than $16 billion of its own punitive levies on American products.

“The two leaders discussed the United States’ Section 232 tariffs on steel and aluminum and Canada’s retaliatory tariffs,” the Prime Minister’s Office said in a readout of the call.

They “also discussed relations with China, uranium, and the new NAFTA.”

ALSO READ: Americans #ThankCanada as tariff spat continues

One year ago, Commerce Secretary Wilbur Ross said the tariffs on Canada, as well as Mexico, were necessary to prevent a flood of cheap Chinese steel into the U.S. through its NAFTA partner countries.

Ross also said the U.S. was imposing tariffs on Canada and Mexico because the trade talks were taking too long, even though they were ostensibly imposed under a section of American trade law that gives the president that authority to do that to protect national security.

The Trudeau government has branded the tariffs as illegal, absurd and insulting, while Canada and Mexico say that it will be tough to ratify the new continental free trade agreement — the United States-Mexico-Canada Agreement, or USMCA — if they remain in place.

Ottawa has also been working to demonstrate to Washington that it has taken steps to stem the flow of cheaper Chinese metals into Canada.

But Canada has stood firm with the U.S. on one key, related point: it has steadfastly refused to agree to quotas or other limits on its exports to get the tariffs lifted.

Canadian sources have described the idea of a quota system as a non-starter and a concession that Canada was not prepared to make.

The agreement says the U.S. and Canada will establish a process for monitoring steel and aluminum trade between them.

“In the event that imports of steel or aluminum products surge meaningfully beyond historic volumes of trade over a period of time, with consideration of market share, the importing country may request consultations with the exporting country. After such consultations, the importing party may impose duties of 25 per cent for steel and 10 per cent for aluminum,”says the agreement.

Canadian negotiators persuaded their American counterparts to accept that position — a compromise that could allow the Trump administration to holster one of its favourite new trade weapons, while claiming to have enlisted the help of an ally in its ongoing fight.

“We have always said we are not the problem and that USMCA wouldn’t pass as long as the tariffs were in place. We would never accept a hard quota. I think they finally heard us,” said one source, speaking on the condition of anonymity, citing the delicate new phase of the negotiations.

“Now we can work together to deal with overproduction outside of North America and approve the improved free-trade deal.”

Dan Ujczo, a trade lawyer and Canada-U.S. specialist in Columbus, Ohio, said he believes the U.S. has “moved off of its demand for a hard quota, which is a key factor in the new optimism.”

The discussions among the three countries have now moved to creating “enhanced monitoring” and “anti-circumvention measures” relating to non-North American steel imports.

The three countries are also considering strict new rules of origin for steel and aluminum, said Ujczo.

“Companies that rely on non-North American steel and aluminum in their NAFTA/USMCA region supply chains are highly likely to be impacted by these discussions,” he said.

“While companies may celebrate a top-line without a hard quota, the devilment will be in the details.”

A U.S. Commerce Department review found that imports of vehicles and some auto parts could hurt U.S. national security, but Trump decided to wait 180 days before imposing tariffs and ordered new talks to deal with the issue.

The Commerce Department reached the same conclusion about Canadian and Mexican steel and aluminum imports almost one year ago.

Mike Blanchfield and James McCarten, The Canadian Press

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

WATCH: Van, tools stolen from Penticton company facing third theft in one month

An Eckert Electric Ltd. van was stolen this morning at gas station with employees close by

Village seeks answers after sewage dumped into trash cans

The village of Keremeos is looking for the individual responsible to inform them of proper disposal.

Sewer service planned for South Okanagan community of Kaleden

Regional District of Okanagan Similkameen plans to extend Okanagan Falls system into Kaleden

Keremeos RCMP report significant decreases in crime in 2019

Almost every category reported saw decreases compared to 2018.

VIDEO: B.C. senior recalls ‘crazy’ wartime decision to grab bear cub from den

Henry Martens – now 96 – says he was lucky to be alive after youthful decision to enter a bear’s den

Gas drops below a dollar per litre in Penticton

Two stores in Penticton have gas below a dollar.

Pawsative Pups: You have a new puppy, now what?

Lisa Davies is a new columnist for Black Press who writes about dog training

Loans or gifts? Judge rules woman must pay B.C. man back $7K

B.C. judge rules that woman must pay back more than $7,000 in advanced funds to man

VIDEO: Outpouring of worldwide support for bullied Australian boy

Australian actor Hugh Jackman said ‘you are stronger than you know, mate’

‘A horror show:’ Ex-employee shares experience at problematic Chilliwack seniors’ home

Workers are paid below industry standard at all Retirement Concepts facilities

Forest industry protests northern B.C. caribou protection deal

B.C. Mining Association supports federal-Indigenous plan

Youth-led report calls on B.C. government to create plan to end youth homelessness

There are no dedicated programs for youth homelessness at federal, provincial level, report says

Regional District of Okanagan Similkameen adopts 2020 budget

$57.9 million budget is 11.2 per cent higher than last year’s amount

Most Read