The federal government should consider dropping retaliatory tariffs against the United States, Ontario’s economic development minister said Monday, as he and his Quebec counterpart pressed Ottawa for action on U.S. levies on steel and aluminum.
The tariffs were imposed last year by the U.S., whose commerce secretary has said they were designed to address the world’s overproduction and overcapacity of steel. The federal Liberals were criticized last fall for signing a new North American trade pact, which includes the U.S., without securing any guarantees from Washington that it would lift the levies.
Ottawa has applied retaliatory tariffs on $16.6-billion worth of U.S. imports of steel, aluminum and other products, and has announced a financial aid package for industries caught in the crossfire, including up to $2 billion in new funding and support for workers in steel, aluminum and manufacturing sectors.
The tariffs are hurting industries and workers in both Canada and the U.S., said Ontario Economic Development Minister Todd Smith. If Ottawa dropped its countermeasure tariffs, it could lead the U.S. to drop theirs, he said.
A Dofasco employee looks at rolls of coiled steel in Hamilton Ont. The U.S. applied steel and aluminum tariffs last year. (Tara Walton/Canadian Press)
“This is one thing that government can control,” he said. “We can control punitive tariffs. These tariffs are unsustainable on both sides of the border.”
‘There’s been no movement on this’
Premier Doug Ford has suggested to the federal government that Canada’s tariffs should be dropped first, Smith said, though he admitted there is no indication doing so would lead the U.S. to in turn remove its tariffs.
“But clearly something has to be done,” Smith said. “These tariffs have been in place since June of last year and there’s been no movement on this.”
Smith and Quebec Economy and Innovation Minister Pierre Fitzgibbon sent a letter Monday to federal Finance Minister Bill Morneau, calling on Ottawa to secure the permanent removal of all tariffs on Canadian steel and aluminum.
Morneau has met with U.S. Treasury Secretary Steven Mnuchin, and Prime Minister Justin Trudeau has discussed the tariffs over the phone with U.S. President Donald Trump.
Canada has rejected the premise of the American duties — that its metals exports pose a national-security threat to the U.S. — and has been fighting for the removal of the tariffs.