US – Canada trade war will force Canada to end alliance with The USA

Canada and United States are the world’s largest trading partners and close allies. After the signing of the Canada-United States Free Trade Agreement in 1998, a very high volume of trade and migration and a heavy overlapping of popular and elite culture have generated closer ties between the two neighbors.Both these nations have the world’s longest shared border. But, recent difficulties included the environment concern, illegal immigration, threat of terrorism and increasing trade disputes between Canada and US.

Canada – US alliance will be in danger. Canada will join the front with European countries to fight against tariffs imposed by US and global economic challenges that would occur because of protectionism tendencies’ of US.

In April, 2017 US slapped hefty tariffs on Canadian softwood lumber and after that, in June, 2017, Canada announced C$867m (USD 640m) in relief for country’s lumber industry.

Later, on Thursday, November 2, 2017, the US Department of Commerce said it has concluded that imports of Canadian softwood Lumber are unfairly subsidized and efforts to reach a negotiated agreement with Canada have failed. The US has set final tariffs on Canadian softwood lumber producers above 20%.

In retaliation to the announcement of tariffs, Canada called the decision and anti-dumping duties on lumber as – “unfair, unwarranted and deeply troubling”.

Canada’s foreign affairs minister Chrystia Freeland in a joint statement with Natural Resource minister Jim Carr said that,  they “will forcefully defend” the domestic softwood lumber industry. Freeland described the Trump administration the most protectionists since 1930.

Canada pushed back and won the victory In January 2018, when a US court rejected Boeing Co’s call for punitive duties against Bombardier Corp passenger jet.

On Thursday, March 1, 2018, US president Donald Trump unveiled the global tariffs of 25% on import of steel and 10% on aluminum, citing national security concern but delayed enacting the same for some countries and did not make clear that if they would apply to Canada too.

In retaliation to the tariffs Freeland said that trade restrictions are absolutely unacceptable and will take responsive measures to defend its trade interests and workers. Trade minister of Canada, Francois Philippe Champagne told reporters in Ottawa, “We will always be there to defend workers and Industry. We showed it on softwood lumber and showed it with the Boeing case”.

On Thursday, May 31, 2018 Donald Trump pushed ahead with tariffs on steel and aluminum against Canada, EU and Mexico, repeating his claim that NAFTA has been a terrible deal for US, allowing Canada and Mexico to make “many billions of dollars” at the expense of Americans.

In retaliation to the tariffs imposed by US, Canada hit back to US tariffs by announcing duties on up to C$16.6 billion in American imports.

Canadian Prime Minister Justin Trudeau told a news conference, the US tariffs were “totally unacceptable”. He said, “These tariffs are an affront to the long standing security partnership between Canada and United States, and in particular, an affront to the thousands of Canadians who fought and died alongside their American brothers in arms”.

The Prime Minister said, “We have to believe that at some point, common sense will prevail. But we see no sign of that in this action today by US administration”.

Foreign Minister of Canada, Chrystia Freeland said that Canadian tariffs will be applicable to US steel and aluminum as well as consumer products including yogurt, coffee, sugar, toilet paper, sailboats, mattresses, washing machines and lawn movers from July 1, 2018.

Freeland said that the Canadian government will also file a challenge to the US tariffs on Canadian steel and aluminum with WTO. It also said that Canada buys more American steel than any other country that accounts for upto 50 percent of US exports  and the steel and aluminum industry is highly integrated.

In response to the US national security justification for its measures, Trudeau said, “Canada is a secure supplier of aluminum and steel to the US defense industry, putting aluminum in American planes and steel in American tanks and so Canada could be considered a national security threat to the United States is inconceivable”.

A senior government official of Canada said that Donald Trump’s decision to impose tariffs on steel and aluminum from Canada and Mexico mean the chances of ever striking a new NAFTA deal have “just fallen through the floor”.

Whereas about negotiations on NAFTA, Trump told reporters on Friday, June 1, 2018, outside the White House, “I would not mind seeing NAFTA where you go by a different name, where you make a separate deal with Canada and a separate deal with Mexico, because you are talking about very two different countries”.

On Thursday, June 6, 2018, President Trump reportedly asked in a call with Prime Minister Trudeau over new tariffs, “Did you guys burn down the White House?”. But in 1812 Canada did not exist, it was made up of British colonies and Canada became a country in 1867.

In response, Trudeau told a press conference with French President Macron, “It is laughable to say that Canada, France can represent a threat to America’s national security, as we are the best allies that the US has had for a long time”.

On June 10, 2018, President Trump exited early from G7 summit (group of most advanced economies led by US) and insulted Canadian Prime Minister Justin Trudeau, calling him very dishonest and weak, and instructed US representatives not to endorse the communique as US look at tariffs on automobiles flooding the US markets.

Later on Trump’s economic advisor Larry Kudlow said that Trudeau had betrayed the G7 and stabbed US in the back.

Justin Trudeau told reporters that “Canadians are polite and reasonable but we will also not be pushed around”. In response to that Trump aide Peter Navarro said on fox news “There is a special place for any foreign leader in hell that engages in bad faith diplomacy with President Trump and then tries to stab him in the back on the way out the door and that’s what bad faith Justin Trudeau did with that stunt press conference”.

On June 12, 2018, in response to Trudeau’s press conference at the end of the G7 summit, Trump said that during the press conference on Trump-Kim summit, “He learned, that is going to cost a lot of money for people of Canada. He learned.”

Canada is the largest supplier of both steel and aluminum to the United States. Canada sends about 75 percent of its goods exports to the United States and would be vulnerable if a trade war erupted.

The trade war with Canada, one of the closest ally and a friendly neighbor of US, will force it to end the alliance with US and to look for new allies who have common interest, including France, Germany and Japan. Canada will join the front with European countries to fight against tariffs imposed by US and global economic challenges that would occur because of protectionism tendencies’ of US.