From ketchup and whiskey to toilet paper and orange juice, Canada’s list of retaliatory tariffs has been carefully researched and thought out. Foreign Affairs Minister Chrystia Freeland revealed the final list this morning in Hamilton, home to two large steel manufacturers.
The Canadian government is also going to reveal a compensation package that is expected to be in the same range as the $847 million in loans made available to the softwood lumber industry, as a way to directly support the steel and aluminum industries and their workers.
The package could include loans, loan guarantees, commercial financing and support to help firms expand overseas markets. It could also include money to help affected workers learn new skills and provided support for work-sharing agreements.
Tariffs to hit some states very hard
The retaliatory tariffs are set to start appropriately enough, on Canada Day, and are in response to President Donald Trump’s decision last month to impose 25 percent tariffs on Canadian steel and 10 percent tariffs on aluminum. Canada’s response hinges on hitting the states that went to Trump during the election in 2016.
In 2017, Canada imported about $5 billion worth of goods on the list being revealed today from Pennsylvania, Ohio, Michigan, Wisconsin, and Illinois alone. Ohio, which has always been a swing state in national elections will probably be the hardest hit. Ohio exported about $1,3 billion worth of goods to Canada last year.
“Ohio, as you know, is disproportionately hit. We’re hit harder than any other state by the Canadian retaliatory tariffs,” Sen. Rob Portman, a Republican, recently told the Senate finance committee.
But Ohio will not have to bear all the pain. Pennsylvania leads all U.S. states in exports to Canada with $81 million in 2017. At risk is Kraft Heinz, which produces the ketchup on the list. Av Maharaj, vice president of corporate and legal affairs at Kraft Heinz Canada told the Canadian press the company was “obviously disappointed” by the escalation in the trade war.
“We have a very integrated supply chain at work that runs across North America and we don’t believe the tariffs imposed by Mr. Trump or the Canadian government are helpful for business,” Maharaj said in an interview.
“We are just now getting a handle on it, but I can tell you that the implication of the tariffs will be millions, potentially millions of dollars, if we do nothing and so we are obviously reaching out on both sides of the border and trying to figure out what we can do from a supply chain perspective to minimize the effects.”
The most and the least possible damage
The Trudeau government has carefully assessed where the counter-tariffs will hurt the most. “In putting together these lists, the government and our fine officials have worked really hard to find lists that have the minimal impact on Canadians,” Foreign Affairs Minister Chrystia Freeland said recently in testimony before a parliamentary trade committee.
“Where possible we have sought to avoid intermediate goods and to put products on the list that can be easily sourced from either Canadian or other non-U.S. suppliers… The price will be paid in part by American consumers and by American businesses.”
However, the tit-for-tat response by Canada will end up ruining what has been a very open and positive relationship between the two countries. There is a growing movement on social media in Canada that focuses on boycotting American goods.
YUP! I'm definietly boycotting USA until this ignorant idiot is out of office. #BoycottUSA June 25, 2018
Two Twitter hashtags have sprung up – #BuyCanadian and #BoycottUSA – as consumers express their dislike of U.S. President Donald Trump’s imposition of tariffs on Canadian steel and aluminum as of June 1 and threatened levies on Canada-made vehicles.
And again, speaking of ketchup, many consumers are telling people to buy French’s ketchup instead of Kraft Heinz because French’s uses Canadian tomatoes, whereas Kraft Heinz Canada closed its Leamington, Ontario plant in 2015 in favor of U.S. production.
