Politics

Ottawa considering new retaliation to end U.S. tariff fight, source says

Canada is considering new ways to retaliate against the United States in the hopes of getting steel and aluminium tariffs lifted.

Little progress has been made in convincing Trump to kill steel and aluminium tariffs

Retaliation against U.S. tariffs on Canadian steel and aluminum included imposing tariffs on items such as ketchup and mustard to pizza and strawberry jam. Now Ottawa is considering a strengthening of that regime in an effort to garner better results. (Mark Blinch/Reuters)

Canada is considering new ways to retaliate against the United States in hope of getting steel and aluminum tariffs lifted.

A senior source with direct knowledge of the situation says Canada is considering launching consultations on whether it should increase its retaliatory tariffs.

The source says Canada is "going to have to refresh our retaliation to focus their mind."

Last June, the Trump administration introduced 25 per cent tariffs on imported steel and 10 per cent tariffs on imported aluminum.

Prime Minister Justin Trudeau and Foreign Affairs Minister Chrystia Freeland have both called the move illegal and unjust, and introduced $16.6-billion in retaliatory tariffs targeting everything from maple syrup in Maine to Bourbon in Kentucky.

Canada has aggressively lobbied the White House, as well as anyone who has influence with U.S. President Donald Trump in the hopes of getting the tariffs lifted.

But multiple sources say there has been little progress in that effort, and that Trump is quite pleased with himself and his tariffs.

When Canada first retaliated, the government described the counter-measures as "dollar-for-dollar" when compared to the U.S. tariffs.

But the source says the dollar value actual falls significantly short of that threshold.

Increasing retaliatory tariffs

A second source said the reason the Canadian tariffs are not actually dollar-for-dollar is that some importers have been granted exclusions through the remittance process.

The consultations Canada is considering would look at how to increase retaliatory tariffs to actually meet the dollar-for-dollar mark.

"We will obviously look for items that will hurt Canadians the least," the senior source said.

If Canada does look at increasing retaliatory tariffs, it would target products for which Canadians have other purchasing choices.

The idea is up for discussion "given the intransigence of the U.S." the senior source added.

When Trump first introduced the tariffs, the move was widely seen as a NAFTA negotiating tactic. And it was expected that once a new trade agreement was reached, the White House would lift the tariffs.

But the U.S. has not changed its policy.

Trudeau has been criticized by the opposition for signing the agreement before getting the tariffs removed.

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