Trade War and Canadian Pride Mix in Retaliatory Tariffs Against U.S.

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Trade War and Canadian Pride Mix in Retaliatory Tariffs Against U.S.


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OTTAWA — This year on Canada Day, Prime Minister Justin Trudeau will visit a former Heinz ketchup plant in Ontario and, later Sunday, meet steelworkers in Saskatchewan.

It’s a schedule rich with the symbolism of the moment: Sunday is also the day Canada is retaliating against the Trump administration’s tariffs on Canadian steel and aluminum with import duties on $12.6 billion of American products, from ballpoint pens to industrial pipes. The workers Mr. Trudeau is visiting will be in the middle of this fast-escalating trade war.

The White House’s use of a national security argument to justify the duties against a close ally, along with President Trump’s repeated belittling of both Mr. Trudeau and his trade policies, has offended and angered Canadians. On social media, they are calling for boycotts of American products and encouraging one another to look elsewhere for vacation destinations. Mr. Trudeau’s decision to retaliate won a rare endorsement from all three of Canada’s major political parties.

“We’re living in a brand new world,” said Debra Steger, a law professor at the University of Ottawa who is a former senior trade negotiator for Canada and a onetime official at the World Trade Organization. “It has been pretty messy, and it’s not going to get better soon. We really are in a very difficult time.”

The Canadian government said in a statement on Friday that it had reached out to Robert Lighthizer, the United States trade representative, six times this past week in a final bid to resolve the tariff dispute. On Friday, Mr. Trudeau also spoke with the president about Canada’s decision to retaliate. Those efforts, as well as Mr. Trudeau’s earlier attempts to win over Mr. Trump and his advisers, proved unproductive.

The list of Canadian tariffs includes aluminum and steel in various forms. But it also targets a wide variety of consumer products from American states that the Canadian government believes are important to Mr. Trump’s political fortunes. For example, chocolate bars, which largely come from Hershey in Pennsylvania, are on the list.

For other items, like “odoriferous preparations used during religious rites,” the political significance in the United States is unclear.

The government said it had created its list to include only products for which alternatives made in Canada or third countries are readily available. Some industries, however, dispute that.

Peter Hanna is a regional sales manager in Shawinigan, Quebec, for Regal, a motorboat maker based in Orlando, Fla. He said he met on Tuesday with François-Philippe Champagne, the international trade minister, to deliver the message that his dealers in Quebec and other Atlantic provinces rely on American companies for 95 percent of their boats and that Canada’s relatively small boatbuilding industry cannot replace that supply. (The Canadian pleasure-boat industry’s trade group estimates that across all categories of boats, it gets 65 percent of what it needs from American builders.)

“I made it loud and clear: They can’t supply all of our dealers. It’s impossible,” said Mr. Hanna, who once led a large Canadian boat maker, Doral, that succumbed to the combination of free trade with the United States followed by an economic slump in 1990.

Despite the possible effects on his industry, Mr. Hanna backs the government’s decision to retaliate. “It’s right not to get pushed around,” he said. “But you’ve got to pick your spots.”

In addition to the tariffs, Mr. Trudeau’s government said on Friday that it had set aside up to 2 billion Canadian dollars (about $1.5 billion) for assistance to the steel and aluminum industries. It will take a variety of forms, including loans, worker restraining and programs to help reduce layoffs.

Clifford Sosnow, a trade lawyer in Ottawa who previously worked for the foreign affairs department and the Canadian International Trade Tribunal, said it was impossible for Canada to inflict significant economic pain on a neighbor about 10 times its size. He compared the Canada Day tariffs to “a pinprick.”

Ms. Steger, the law professor, agreed. She added that if the tit-for-tat escalated, Canada would soon run out of products to target without bringing widespread price increases for Canadian consumers — and potentially a political cost. But its current tariffs, she said, will be amplified by the actions of other countries.

The Canada Day retaliation, Mr. Sosnow said, appears largely intended for the home crowd more than for the White House. “The prime minister needs to be seen to be responding,” he said.

But he said it remained unclear to him exactly what Canada’s plans were for ending the tariffs and, more important, reaching a new Nafta deal.

And if Mr. Trump takes on the auto industry, sparking another round of retaliation, the threat to Canada’s economy will become even more perilous, Mr. Sosnow said.

“This is a high-stakes game,” he said. “We run the risk of going back to power-based trade rather than rules-based trade. With power-based trade, smaller economies like Canada will hurt.”



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