Canada vows retaliation if US imposes steel and aluminum tariffs

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Canada vows retaliation if US imposes steel and aluminum tariffs

Canada’s Prime Minister calls a proposed U-S tariff on steel and aluminum ‘absolutely unacceptable.’

CGTN’s Karina Huber traveled to the epicenter of Canada’s steel industry where they’re closely monitoring the tariff talks.

On Monday, Justin Trudeau phoned the U.S. President to express his concerns. Donald Trump wants to impose a 25 percent tariff on steel imports and a 10 percent tariff on aluminum.

No country would be harder hit than Canada. The country is the largest supplier of both metals to the United States and wants an exemption.

President Trump signaled his willingness to consider an exemption but only if Canada makes concessions in ongoing negotiations centered around another trade deal – the North America Free Trade Agreement, NAFTA.

“But I have to work on trade deals, we’re working on NAFTA right now and if we’re able to make a deal with Canada and Mexico in NAFTA, then there will be no reason to do the tariffs with Canada and Mexico. But again other countries, we won’t have that choice and unless they can do something for us,” Trump said at a White House news conference.

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Dean Patterson has been in the steel industry his entire life. His business, based in Grimsby, Ontario welds steel into a variety of products that are sold in Canada. The company takes in about half-million dollars annually, but higher steel prices have hit profits recently.

“Currently, the prices are going through the roof,” said Patterson, owner of Rozza Welding and Steel Fabrication. “And us being a small company when we bid on these bigger jobs, trying to get a little bit bigger, the big guys don’t let you in but when they do let you in your prices have to be probably a little bit lower than they should be so with the steel the way it is, it’s just pushing us right out.”

Patterson is worried Donald Trump’s talk of steel tariffs will push prices even higher.

The steel industry directly supports more than 20,000 Canadian workers and another 100,000 workers indirectly. Hamilton, Ontario, is the epicenter of the industry accounting for roughly 50 percent of the country’s steel production – much of it exported to the United States.

The head of Hamilton’s Chamber of Commerce said roughly 40,000 jobs in the community are at stake if Trump carries out his threat.

“The Canadian steel industry has been very insecure for a while now and this could be that thing that just puts it over the edge and thus may ultimately decimate the industry,” said Keanin Loomis, President of the Hamilton Chamber of Commerce.

Canada’s Prime Minister said the tariffs are unacceptable and its foreign minister has warned of retaliation.

Early in the week, Trump tweeted that Canada and Mexico could get an exemption if they make concessions in the North America Free Trade Agreement that is currently being renegotiated.

Canadian officials rejected this proposal, saying the threat of tariffs should not be a part of the NAFTA negotiations. Round seven of the talks wrapped up in Mexico City this week.

Jerry Dias the head of UNIFOR, Canada’s largest private-sector union, attended the NAFTA meeting.

“At one hand we’re talking about negotiating a trade agreement. On the other hand, the President of the United States says trade wars are good. And they’re easy to win,” Dias said. “So, are you there to create a trade war or are you there to come to an agreement on NAFTA? The reality is he’s there for a trade war. So ultimately, he’s going to get one with the world.”

Economists warn a trade war between the two neighbors would hurt both countries. Canada may be the biggest provider of foreign steel to the U.S., but it is also the biggest buyer of U.S. steel.