And so, the trade wars have begun…
In slightly more than a strongly-worded email Canadian PM Justin Turdeau exclaimed his indignance at the Trump administration’s decision to impose tariffs on Canadian steel and aluminum imports, saying it is an “affront”:
“Let me be clear, these tariffs are totally unacceptable,”
Trudeau said “Canada is a secure supplier” of metals to the U.S. military, and the idea of a security threat “is inconceivable.” He called the tariffs “punitive” noting that US has a $2billion steel trade surplus with Canada.
With that he announced retaliatory tariffs against the US.
Canadian Foreign Affairs Minister Chrystia Freeland announced “dollar-for-dollar tariffs for every dollar levied against Canadians by the U.S.,” starting July 1 that will remain in place as long as U.S. tariffs do.
The tariffs cover Whiskey, Orange Juice, and other food products as well as steel and aluminum.
Measures will apply to up to C$16.6 billion dollars of products.
Canada’s full list of actions includes 25% tariff on the following…
| Tariff heading, subheading or item* | Description** |
|---|---|
| 72.06 | Iron and non-alloy steel in ingots or other primary forms (excluding iron of heading 72.03) |
| 72.07 | Semi-finished products of iron or non-alloy steel |
| 72.08 | Flat-rolled products of iron or non-alloy steel, of a width of 600 mm or more, hot-rolled, not clad, plated or coated |
| 72.09 | Flat-rolled products of iron or non-alloy steel, of a width of 600 mm or more, cold-rolled (cold-reduced), not clad, plated or coated |
| 72.10 | Flat-rolled products of iron or non-alloy steel, of a width of 600 mm or more, clad, plated or coated |
| 72.11 | Flat-rolled products of iron or non-alloy steel, of a width of less than 600 mm, not clad, plated or coated |
| 72.12 | Flat-rolled products of iron or non-alloy steel, of a width of less than 600 mm, clad, plated or coated |
| 72.13 | Bars and rods, hot-rolled, in irregularly wound coils, of iron or non-alloy steel |
| 72.14 | Bars and rods of iron or non-alloy steel, not further worked than forged, hot-rolled, hot-drawn or hot-extruded, but including those twisted after rolling. |
| 72.15 | Other bars and rods of iron or non-alloy steel |
| 72.17 | Wire of iron or non-alloy steel |
| 72.18 | Stainless steel in ingots or other primary forms; semi-finished products of stainless steel |
| 72.19 | Flat-rolled products of stainless steel, of a width of 600 mm or more |
| 72.20 | Flat-rolled products of stainless steel, of a width of less than 600 mm |
| 72.21 | Bars and rods, hot-rolled, in irregularly wound coils, of stainless steel |
| 72.22 | Other bars and rods of stainless steel; angles, shapes and sections of stainless steel |
| 72.23 | Wire of stainless steel |
| 72.24 | Other alloy steel in ingots or other primary forms; semi-finished products of other alloy steel |
| 72.25 | Flat-rolled products of other alloy steel, of a width of 600 mm or more |
| 72.26 | Flat-rolled products of other alloy steel, of a width of less than 600 mm |
| 72.27 | Bars and rods, hot-rolled, in irregularly wound coils, of other alloy steel |
| 72.28 | Other bars and rods of other alloy steel; angles, shapes and sections, of other alloy steel; hollow drill bars and rods, of alloy or non-alloy steel |
| 72.29 | Wire of other alloy steel. |
| 7216.10 | U, I or H sections, of iron or non-alloy steel, not further worked than hot-rolled, hot-drawn or extruded, of a height of less than 80 mm |
| 7216.21 | L sections, of iron or non-alloy steel, not further worked than hot-rolled, hot-drawn or extruded, of a height of less than 80 mm |
| 7216.22 | T sections, of iron or non-alloy steel, not further worked than hot-rolled, hot-drawn or extruded, of a height of less than 80 mm |
| 7216.50 | Other angles, shapes and sections, of iron or non-alloy steel, not further worked than hot-rolled, hot-drawn or extruded |
| 7216.99 | Other angles, shapes and sections, of iron or non-alloy steel |
| 73.05 | Other tubes and pipes (for example, welded, riveted or similarly closed), having circular cross-sections, the external diameter of which exceeds 406.4 mm, of iron or steel |
| 73.06 | Other tubes, pipes and hollow profiles (for example, open seam or welded, riveted or similarly closed), of iron or steel |
| 7301.10 | Sheet piling of iron or steel, whether or not drilled, punched or made from assembled elements |
| 7302.40 | Railway or tramway track construction material of iron or steel: Fish-plates and sole plates |
| 7302.90 | Other railway or tramway track construction material of iron or steel |
| 7304.11 | Line pipe of a kind used for oil or gas pipelines: Of stainless steel |
| 7304.19 | Line pipe of a kind used for oil or gas pipelines: Other |
| 7304.24 | Casing or tubing, of a kind used in drilling for oil or gas: Of stainless steel |
| 7304.29 | Other casing or tubing, of a kind used in drilling for oil or gas |
| 7304.31 | Tubes and pipes, of circular cross-section, of iron or non-alloy steel: Cold-drawn or cold-rolled (cold-reduced) |
| 7304.39 | Other tubes and pipes, of circular cross-section, of iron or non-alloy steel |
| 7304.41 | Tubes and pipes, of circular cross-section, of stainless steel: Cold-drawn or cold-rolled (cold-reduced) |
| 7304.49 | Other tubes and pipes, of circular cross-section, of stainless steel |
| 7304.51 | Tubes and pipes, of circular cross-section, of other alloy steel: Cold-drawn or cold-rolled (cold-reduced) |
| 7304.59 | Other tubes and pipes, of circular cross-section, of other alloy steel |
| 7304.90 | Tubes, pipes and hollow profiles, seamless, of iron (other than cast iron) or steel. |
| *Where listed at the heading or subheading level, coverage includes all tariff items under that heading or subheading. **Descriptions are included for illustrative purposes and do not necessarily reflect Harmonized System nomenclature. |
|
And 10% tariff on the following items…
| Tariff heading, subheading or item* | Description** |
|---|---|
| 0403.10 | Yogourt |
| 0901.21 | Coffee, roasted: Not decaffeinated |
| 1602.32.11 | Prepared meals: Of spent fowl; Specially defined mixtures |
| 1602.32.92 | Other: Specially defined mixtures, other than in cans or glass jars; Spent fowl other than in cans or glass jars |
| 1602.50.10 | Prepared meals, of bovine |
| 1602.50.99 | Other prepared or preserved meat of bovine, other than in cans or glass jars |
| 1702.20 | Maple sugar and maple syrup |
| 1704.90.20 | Liquorice candy; Toffee |
| 1704.90.90 | Other sugar confectionery (including white chocolate), not containing cocoa. |
| 1806.31 | Other chocolate, in blocks, slabs or bars: Filled |
| 1806.32 | Other chocolate, in blocks, slabs or bars: Not filled |
| 1905.90.51 | Pizza and quiche |
| 2001.10 | Cucumbers and gherkins |
| 2007.99.10 | Strawberry jam |
| 2007.99.90 | Nut purées and nut pastes, berry purées, other fruit purées other than banana purée, other jams, jellies |
| 2009.12 | Orange juice: Not frozen, of a Brix value not exceeding 20 |
| 2103.10 | Soya sauce |
| 2103.20 | Tomato ketchup and other tomato sauces |
| 2103.30.20 | Prepared mustard |
| 2103.90 | Mayonnaise, salad dressing, mixed condiments and mixed seasonings, other sauces |
| 2104.10 | Soups and broths and preparations therefor |
| 2202.10 | Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured |
| 2208.30 | Whiskies |
| 3304.30 | Manicure or pedicure preparations |
| 3305.30 | Hair lacquers |
| 3307.10 | Pre-shave, shaving or after-shave preparations |
| 3307.49 | Preparations for perfuming or deodorizing rooms, including odoriferous preparations used during religious rites, nes |
| 3401.30 | Organic surface-active products and preparations for washing the skin, in the form of liquid or cream and put up for retail sale, whether or not containing soap |
| 3402.20.10 | Automatic dishwasher detergents |
| 3406.00.90 | Other candles and tapers and the like not including those for birthdays, Christmas or other festive occasions |
| 3506.10 | Products suitable for use as glues or adhesives, put up for retail sale as glues or adhesives, not exceeding a net weight of 1 kg |
| 3808.91.10 | Insecticides: In packages of a gross weight not exceeding 1.36 kg each |
| 3808.92.10 | Fungicides: In packages of a gross weight not exceeding 1.36 kg each |
| 3808.93.10 | Herbicides, anti-sprouting products and plant-growth regulators: In packages of a gross weight not exceeding 1.36 kg each |
| 3923.21.90 | Other sacks and bags (including cones) of polymers of ethylene |
| 3923.29.90 | Other sacks and bags (including cones) of other plastics, nes |
| 3924.10 | Tableware and kitchenware |
| 3924.90 | Household articles and hygienic or toilet articles, of plastics |
| 4412.39 | Plywood, consisting solely of sheets of wood (other than bamboo), each ply not exceeding 6 mm thickness: Other, with both outer plies of coniferous wood |
| 4412.99.90 | Other plywood, veneered panels and similar laminated wood |
| 4802.56 | Other paper and paperboard, not containing fibres obtained by a mechanical or chemi-mechanical process or of which not more than 10% by weight of the total fibre content consists of such fibres: Weighing 40 g/m² or more but not more than 150 g/m², in sheets with one side not exceeding 435 mm and the other side not exceeding 297 mm in the unfolded state |
| 4811.59 | Other paper and paperboard coated, impregnated or covered with plastics (excluding adhesives) |
| 4818.10 | Toilet paper |
| 4818.20 | Handkerchiefs, cleansing or facial tissues and towels |
| 4818.30 | Tablecloths and serviettes |
| 4822.10 | Bobbins, spools caps and similar supports of a kind used for winding textile yarn, of paper pulp, paper or paperboard (whether or not perforated or hardened) |
| 4822.90 | Other bobbins, spools caps and similar supports of paper pulp, paper or paperboard (whether or not perforated or hardened) |
| 4909.00 | Printed or illustrated postcards; printed cards bearing personal greetings, messages or announcements, whether or not illustrated, with or without envelopes or trimmings. |
| 7310.10 | Beer kegs, of iron or steel, of a capacity of 50 litres or more |
| 7310.29 | Beer kegs, of iron or steel, of a capacity of less than 50 litres |
| 7321.90 | Parts of iron or steel, of stoves, ranges, grates, cookers (including those with subsidiary boilers for central heating), barbeques, braziers, gas-rings, plate warmers and similar non-electric domestic appliances |
| 76.04 | Aluminum bars, rods and profiles |
| 76.05 | Aluminum wire |
| 76.06 | Aluminum plates, sheets and strip, of a thickness exceeding 0.2 mm |
| 76.07 | Aluminum foil (whether or not printed or backed with paper, paperboard, plastics or similar backing materials) of a thickness (excluding any backing) not exceeding 0.2 mm |
| 76.08 | Aluminum tubes and pipes |
| 76.09 | Aluminum tube or pipe fittings (for example, couplings, elbows, sleeves) |
| 76.10 | Aluminum structures (excluding prefabricated buildings of heading 94.06) and parts of structures (for example, bridges and bridge-sections, towers, lattice masts, roofs, roofing frameworks, doors and windows and their frames and thresholds for doors, balustrades, pillars and columns); aluminum plates, rods, profiles, tubes and the like, prepared for use in structures |
| 76.11 | Aluminum reservoirs, tanks, vats and similar containers, for any material (other than compressed or liquefied gas), of a capacity exceeding 300 litres, whether or not lined or heat-insulated, but not fitted with mechanical or thermal equipment |
| 76.12 | Aluminum casks, drums, cans, boxes and similar containers (including rigid or collapsible tubular containers), for any material (other than compressed or liquefied gas), of a capacity not exceeding 300 litres, whether or not lined or heat-insulated, but not fitted with mechanical or thermal equipment |
| 76.13 | Aluminum containers for compressed or liquefied gas |
| 76.14 | Stranded wire, cables, plaited bands and the like, of aluminum, not electrically insulated |
| 76.15 | Table, kitchen or other household articles and parts thereof, of aluminum; pot scourers and scouring or polishing pads, gloves and the like, of aluminum; sanitary ware and parts thereof, of aluminum |
| 76.16 | Other articles of aluminum |
| 8418.10 | Combined refrigerator-freezers, fitted with separate external doors |
| 8419.19 | Instantaneous or storage water heaters, non-electric: Other than instantaneous gas water heaters |
| 8422.11.90 | Other dish washing machines, other than of the household type |
| 8433.11 | Mowers for lawns, parks or sports-grounds: Powered, with the cutting device rotating in a horizontal plane |
| 8450.11 | Household or laundry-type washing machines, each of a dry linen capacity not exceeding 10 kg: Fully-automatic machines |
| 8450.20 | Household or laundry-type washing machines, each of a dry linen capacity exceeding 10 kg |
| 85.37 | Boards, panels, consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading 85.35 or 85.36, for electric control or the distribution of electricity, including those incorporating instruments or apparatus of Chapter 90, and numerical control apparatus, other than switching apparatus of heading 85.17 |
| 8903.10 | Inflatable boats |
| 8903.91 | Sailboats, with or without auxiliary motor |
| 8903.92 | Motorboats, other than outboard motorboats |
| 8903.99.90 | Outboard motorboats, other vessels for pleasure or sports, nes |
| 90.32 | Automatic regulating or controlling instruments and apparatus |
| 9401.61 | Other seats, with wooden frames: Upholstered |
| 9404.21 | Mattresses of cellular rubber or plastics, whether or not covered |
| 9404.29 | Mattresses of other materials |
| 9404.30 | Sleeping bags |
| 9404.90 | Other bedding and similar articles, nes |
| 9504.40 | Playing cards |
| 9608.10 | Ball point pens |
| 9608.20 | Felt tipped and other porous-tipped pens and markers |
|
*Where listed at the heading or subheading level, coverage includes all tariff items under that heading or subheading. |
|
As Goldman explains, the decision to impose tariffs on Canada and Mexico (and now seeing Canada’s response) suggests that prospects for a NAFTA agreement in the near-term are fading.
The Administration’s negotiating stance is often unpredictable so there is a risk of over-interpreting any single event. That said, this represents another signal that prospects for a near-term NAFTA deal are fading, just a few weeks after it had appeared fairly likely that a “skinny” agreement involving the auto sector might be reached.
However, Goldman note that the incremental inflation effect of these tit-for-tat tariffs should be small. We estimate that adding Canada, Mexico, and the EU to the countries facing a tariff of 25% on steel and 10% on aluminum could boost core PCE by roughly 1bp. Imports from NAFTA and EU countries make up just under half of steel and aluminum imports.
Finally, in his Q&A Trudeau made it clear that “Canada’s relationship with US is deep and complex” but warned that “US will harm its own people with such measures.”
Mexico said earlier that it would impose its own retaliatory tariffs on a wide range of products from US steel to pork, sausages and fruit.
This article appeared at ZeroHedge.com at: https://www.zerohedge.com/news/2018-05-31/canada-unleashes-dollar-dollar-retaliatory-tariffs-us
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