Canada could soon propose retaliatory tariffs on “a significant number of agricultural products,” including U.S. wine, pork, apples and ethanol, as part of its campaign for removal of American tariffs on steel and aluminum, said ambassador David MacNaughton on Monday. The food and ag products would be part of a “refreshed” list of tariffs that originally took effect last July 1.
During a luncheon speech to the North American Agricultural Journalists, MacNaughton said the Section 232 tariffs, imposed by President Trump on the metals on the basis of national security, should be removed now that the new NAFTA has been negotiated. “We have indicated that is an important condition for us,” said the ambassador.
Continuation of the tariffs could slow or even prevent action in Canada on the United States-Mexico-Canada Agreement, the formal name for the successor to NAFTA, according to Canadian officials. Parliament is scheduled to adjourn on June 15 ahead of elections in October. “If Section 232 tariffs are still in place, our relations with the United States will be a central part of the campaign,” said MacNaughton. “It won’t be pleasant…”
The updated list of Canadian targets could appear within a week. It will be a counter-action to U.S. tariffs, not an escalation, said MacNaughton. While the main focus of the list is trade in metals, “a significant number of agricultural products” also are likely to appear. Apples, pork and ethanol have been mentioned, said the ambassador. Wine probably will get a look as well, he said. “I think it would be a fairly long list.” There would be a 45-day review before Canada takes action on the package.
Trump administration officials have described the steel and aluminium tariffs, which inspired retaliation by Mexico too, as a lever for agreement on the USMCA. They have suggested the tariffs could be succeeded by import quotas. Canada opposes that idea.
Canada and Mexico account for one-third of U.S. food and agricultural trade.
MacNaughton expressed dismay at the possibility the United States would resolve its trade war with China with Beijing promising larger purchases of U.S. products, including farm exports. China has slowed its purchases of Canadian goods such as canola because Canada, at Washington’s request, arrested the chief financial officer of technology company Huawei. “We would expect the United States … to be a strong ally of ours,” said MacNaughton.
Dale Moore, executive vice president of the American Farm Bureau Federation, said he expects that Congress will vote on USMCA ratification this year but did not suggest a date. The Section 232 tariffs “need to be addressed,” said Moore. U.S. farm groups support the trade pact and repeatedly have urged an end to the tariffs. Senate Finance chairman Chuck Grassley of Iowa directly asked Trump to remove the tariffs a few weeks ago and got a flat rejection.
“I am convinced and confident we will get USMCA done,” said Moore.