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Prime Minister Justin Trudeau's government released yesterday the final list of articles that will be targeted as of July 1st. Some items will be subject to 10% or 25% taxes.
"We will not climb and we will not back down," said Canadian Foreign Minister Chrystia Freeland.
Taxes on items including ketchup, lawn mowers and motorboats are $ 12.6 billion.
"It's a perfectly reciprocal action," Freeland said. "It's a dollar for the dollar's answer." Freeland said they had no other choice and called the rates unfortunate.
Many American products have been chosen for their political rather than economic impact. For example, Canada imports every year for only $ 3 million of yogurt from the United States and most of them come from a Wisconsin plant, the home state of the House Speaker. , Paul Ryan. The product will now be hit with a 10 percent fee.
Another product on the list is whiskey, which comes from Tennessee and Kentucky, the latter of which is the home state of Republican Senate leader Mitch McConnell.
Freeland also said that they are ready if US President Donald Trump escalates the trade war.
"It is absolutely imperative that common sense prevail," she said. "After saying that our approach since the first day of NAFTA negotiations has been hoping for the best but to prepare for the worst."
Trump explained the tariffs for steel and aluminum saying that imported metals were threatening the national security of the United States – a justification that countries rarely use because it can be easily abused. It also threatens to impose another national security-based tariff on imported cars, trucks and auto parts. This threat could be a bargaining ploy to restart the talks on the North American Free Trade Agreement.
Freeland stated that there was no need to impose other US tariffs in response to Canada's actions.
Canadians are particularly concerned about automobile rates because the industry is essential to the Canadian economy. Mr. Freeland said such rates would be "absurd" because the North American auto industry is highly integrated and parts manufactured in Canada are often sold to Canadians who make cars made in the United States. "Any commercial action is disruptive on both sides of the border," said Freeland.
Freeland said that an "intensive phase" of NAFTA renegotiations would resume soon after Sunday's elections in Mexico.
"I do not think we will see a reaction from the Trump administration, they are prepared for it," said Dan Ujczo, a commercial law attorney in Columbus, Ohio. "Frankly, the Canadian retaliation is a drop of water in the bucket compared to the retaliation we are going to see from China and elsewhere."
Doubts of Ujczo Trump will announce automatic tariffs because it would be a "red line for the US Congress" before the mid-term elections.
The US Department of Commerce holds hearings on auto rates at the end of July and will subsequently release an investigation report on the question of whether they are threatening national security.
"I do not think we are waiting for the Congress that he is engaging after the midterm elections, he gave the president a long leash and he will continue to do so, the car rates will disrupt that, "he said.
The Canadian government also announced $ 1.5 billion in subsidies for the Canadian steel and aluminum industries.
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