Don't retaliate against U.S. with tariffs, Calgary Chamber of Commerce implores Ottawa

Calgary's Chamber of Commerce is asking the federal government not to retaliate with tariffs against the United States.

Organization says it's concerned about escalating trade dispute

U.S. President Donald Trump and Canadian Prime Minister Justin Trudeau participate in a working session of the G7 Summit in La Malbaie, Que., earlier this month. (AFP/Getty Images)

Calgary's Chamber of Commerce is asking the federal government not to retaliate with tariffs and escalate a trade war, following the U.S. move to slap tariffs on Canadian steel and aluminum.

The chamber provided a written submission to Ottawa on June 15 in advance of countermeasures that are expected to include a mix of tariffs and quotas. 

Canada has already announced some tariffs on U.S. goods that will kick in July 1, including 25 per cent on steel and aluminum, and 10 per cent on consumer goods including boats, appliances, mattresses, hair products, coffee and beer kegs.

U.S. steel and aluminum tariffs, at 25 and 10 per cent, respectively, went into effect June 1. 

"We appreciate the effort made to strategically design and target tariffs.… However, we support open and free trade. We are also concerned about further escalation and potentially wider and deeper impacts on Canadian businesses," the submission reads.

Instead of tariffs, the organization has five main suggestions for the federal government.

Dispute settlement

Continue pursuing its challenge against the tariffs through the World Trade Organization and through the North American Free Trade Agreement's dispute settlement provisions (Chapter 20). 

In 2002, the chamber notes, the WTO ruled in the European Union's favour, declaring that U.S. steel tariffs were illegal.

Look for opportunities elsewhere

The chamber suggests that while Canada benefits from having the U.S. as its largest trading partner, it has also made it vulnerable as the U.S. eyes more protectionist stances. 

Instead, the organization pointed to possible opportunities through the Comprehensive Economic and Trade Agreement (CETA) with the EU, the Trans-Pacific Partnership and new relationships with China, India and South America.

Ditch supply management

Instead of tariffs, the chamber calls for other concessions that it says could benefit Canada's economy, like ending the dairy supply-management system. 

"Not only do these tariffs impact American producers, but by reducing competition, Canada's tariff protections also increase prices for Canadian consumers," the chamber states in the submission.

Support export expansion programs

Community-based programs like trade accelerators, all the way up to provincial and federal initiatives like Alberta Export Expansion Package and Export Development Canada, make a big difference when it comes to facilitating exports and investments, the chamber argues.

Promote free trade in the U.S.

Canada should use its ambassadors and trade offices to make the case that the U.S. tariffs don't just hurt Canadians — they hit Americans hard, too, the chamber says. 

"The U.S. tariffs are likely to harm the U.S. economy and the average American voter because Canada buys more American steel than any other country and accounts for 50 per cent of U.S. exports," the submission reads. "U.S. exports of aluminum to Canada support more than 160,000 U.S. jobs."

But if Canada does move ahead with tariffs, which seems likely at this point, the chamber is asking Ottawa to tread lightly and avoid slapping levies on any industries that are still hurting from Alberta's recession.