1 Jun 2018

The Morning After: U.S. Allies Taking Retaliatory Measures Against Trump’s Tariffs

Yesterday morning, the U.S. Administration announced that the temporary steel and aluminum tariff exemptions granted to Canada, Mexico and the European Union would be discontinued as of midnight last night. The three U.S. allies have each announced a list of retaliatory measures in response to the tariffs.

Mexico quickly responded to the announcement with tariffs of its own on imports of various products originating in the U.S., such as “flat steel (hot and cold foil, including coated and various tubes), lamps, pork legs and shoulders, sausages and food preparations, apples, grapes, blueberries, various cheeses, among others, up to an amount comparable to the level of affectation”, the statement reads.

Earlier in May, the EU said it was preparing to hit $3.34 billion worth of U.S. goods with a 25 percent tariff in reaction to the steel and aluminum tariffs. The EU issued a list of U.S products it would target, including a variety of agricultural products, tobacco, textile, steel and many other items. The EU also filed a challenge to the U.S. tariffs at the World Trade Organization on Friday, and announced it would impose “rebalancing measures”.

Canada has also formally requested “WTO consultations with the United States regarding its imposition of punitive tariffs on imports of steel and aluminium from Canada, and more generally, on the United States’ improper use of national security pretexts for protectionist purposes” said Foreign Affairs Minister Chrystia Freeland on Friday. Minister Freeland confirmed Canada and the EU would work together on their WTO challenge. In addition, Canada is requesting the establishment of a NAFTA Chapter 20 panel, initiating NAFTA’s state-to-state dispute settlement mechanism.

Canada has issued a notice of intent to impose countermeasures action against the United States in the form of surtaxes or similar trade-restrictive countermeasures of up to CAD$16.6 billion in imports of steel, aluminum, and a number of other products. Tariffs of 25 percent and 10 percent will be applied to the products listed in Tables 1 and 2 respectively, which can be found here.

If you are a Canadian importer of the goods affected by the tariffs announced by the Government of Canada, your supply chain may impacted as of July 1st, 2018, when the tariffs will take effect. The tariffs will remain in place until the U.S. eliminates its trade-restrictive measures against Canada. A period of consultation with the Government of Canada has begun and written comments may be provided by Canadians no later than June 15, 2018.

If your business imports any of the products Canada has identified as potentially subject to countermeasures, you may wish to participate in the government consultations. The consultation period is short, so you need to act quickly.

The lawyers at Tereposky & DeRose have extensive experience assisting Canadian businesses with government consultations. If you would like to be involved in the process, we are at your disposal.

Greg Tereposky
613.237.1210
gtereposky@tradeisds.com

Vincent DeRose
613.237.8862
vderose@tradeisds.com

Stephanie Desjardins
613-237-0483
sdesjardins@tradeisds.com