Canada dodges tariff bullet, at least for now

The only two countries escaping tariffs were America’s neighbours: Canada and Mexico

Canada appears to have dodged a protectionist bullet, as one of only two countries to receive a provisional exemption from steel and aluminum tariffs set to rip into America’s trading relationships around the globe.

President Donald Trump signed proclamations Thursday slapping U.S. tariffs of 25 per cent on steel and 10 per cent on aluminum from almost every country, with the penalties snapping into effect in 15 days.

After months of frantic lobbying, diplomatic arm-twisting and heated debates within his own administration, Trump made good on his tariff threat at the White House, surrounded by steelworkers.

The only two countries escaping tariffs were America’s neighbours: Canada and Mexico.

Related: Canada, Mexico excused from U.S. tariffs for undetermined period

Related: Possible good news for Canada on tariffs: White House hints ‘carve-out’ coming

It’s not impossible they could be added later, but the president’s own language, the wording of the proclamations and comments from a White House official all went out of their way to avoid any explicit threats against Canada and Mexico, leaving dangling only the vague possibility.

Trump danced around the question of whether the tariff threat will be used to bully Canada and Mexico at the NAFTA bargaining table. He said only that the reprieve remains in place for now and that NAFTA is important to economic and national security.

”Due to the unique nature of our relationship with Canada and Mexico … we’re gonna hold off the tariff for those two countries,” Trump said during a signing ceremony.

”If we don’t make the deal on NAFTA, and if we terminate NAFTA … we’ll start all over again. Or we’ll just do it a different way. But we’ll terminate NAFTA, and that’ll be it. But I have a feeling we’re gonna make a deal on NAFTA. … If we do there won’t be any tariffs on Canada, and there won’t be any tariffs on Mexico.”

The actual formal documents specifically state that Canada and Mexico are a special case, given the continent’s shared commitment to mutual security, an integrated defence industry and the shared fight against dumped steel and that the best way to address U.S. concerns — ”at least at this time” — is by continuing discussions.

The references to security are critical.

By law, the tariffs need to be described as a national security matter. A provision in a 1962 U.S. law allows the president to set emergency tariffs as a security issue. But the White House has repeatedly undermined its own legal case, including by intimating that the tariffs would be held over Canada and Mexico as some kind of negotiating tool to extract NAFTA concessions.

The White House is now clearly avoiding that kind of talk: ”We will have ongoing discussions with Canada and Mexico,” a senior White House official said in a pre-announcement briefing.

The aide expressed frustration at the way the tariffs have been characterized, referring repeatedly to the ”fake news,” the lobbyists and the ”swamp things” that he said exaggerated the ill effects while fighting the measures.

Two polls released this week say the tariffs are unpopular.

But the same official said it truly is a matter of national security — with six U.S. aluminum smelters shutting down the last few years, and just five remaining, and only two operating at full capacity, he said that leaves the U.S. at risk of having to import all its aluminum eventually.

The White House adviser also pushed back against reports casting the process as arbitrary, sloppy and rife for successful legal challenges.

In one alleged example of haphazard policy-making, a report this week said the president raised the tariff rates for branding purposes, increasing them from the 24 and 7 per cent recommended by the Department of Commerce — because he wanted nice, round numbers.

The official insisted that was untrue. He said it was only upon careful calculation of import effects that the numbers landed at 25 per cent and 10 per cent. He did not explain how those round numbers managed to survive intact, even after the formula was later upended by the exclusion from tariffs of major suppliers.

Canada is the No. 1 seller of both steel and aluminum to the U.S.

The fact that Canada might be included on the initial hit list had become a political sore spot for the administration, as U.S. critics of the move ridiculed it by zeroing on the idea of national-security tariffs against a peaceful next-door neighbour and defence ally.

A full-court diplomatic press unfolded in recent days, with Prime Minister Justin Trudeau calling Trump earlier this week, and then speaking Thursday with the Republican leaders of both the House of Representatives and the Senate.

Canada’s ambassador to Washington dined this week with U.S. national-security adviser H.R. McMaster; Foreign Affairs Minister Chrystia Freeland, Natural Resources Minister Jim Carr, Defence Minister Harjit Sajjan, and Transport Minister Marc Garneau all reached out to cabinet counterparts in recent days.

The lobbying found a mostly receptive audience: the U.S. military strongly resisted tariffs against allies and 107 congressional Republicans released a letter this week to express alarm over the move.

“This has been a true Team Canada effort,” said Foreign Affairs Minister Chrystia Freeland, also crediting provincial premiers, businesses and labour leaders.

“This work continues and it will continue until the prospect of these duties is fully and permanently lifted.”

She said Canada planned to keep this issue separate from NAFTA negotiations, as it has done with disputes over softwood lumber, paper, and Bombardier.

Other countries have threatened reprisals, prompting fears of a global trade war. But Trump said other American allies can get exemptions later, in exchange for something in return. He said they need to contact U.S. trade czar Robert Lighthizer, and negotiate.

Alexander Panetta, The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

Full Gospel Church collapses

Clean-up has already begun and fundraising has started to rebuild Witset church.

Telkwa to replace Community Hall roof

Village to put out tender soon for repair work.

Dike along Telkwa River being repaired

West Horizon Contracting won the bid to do the job for $125,350.

Adopted Norwegian man looking for Smithers family

David Hjerto said he was taken away from his biological parents before he turned two.

Smithers pellet plant ready to build

Pinnacle Renewable Holdings and West Fraser Timber approve construction of plant in Smithers.

Ottawa proposes restricted pot labels, packages

Packaging will include red stop sign with marijuana leaf and ‘THC’

How to keep local news visible in your Facebook feed

Facebook has changed the news feed to emphasize personal connections. You might see less news.

B.C.-pioneered wood construction on a roll internationally

Washington state considers mandatory engineered wood for public buildings

Cops say gun-toting robbers used fake police lights to pull over victims

Information wanted on North Shuswap robbery, police impersonation, burnt vehicle, motorhome theft.

BCHL Today: Surrey Eagles and Powell River Kings close to advancing

BCHL Today is a (near) daily look at what’s going on around the league and the junior A world.

Plane filled with smoke lands at Nanaimo Airport

WestJet flight came in from Vancouver

VSO to perform ‘Star Wars’ music while 1977 movie plays on big screen

Three shows for the classic at iconic Orpheum Theatre this summer

B.C. emergency alert system being tested Wednesday

Alarm tone and message will play on TV and radio

BC Conservatives pumped by poll results

Surge in popularity has BC party picturing elected representatives in Victoria

Most Read