Canada hopes to avert new U.S. tariff war, but stands ready to fire: Champagne

WASHINGTON — Canada's foreign affairs minister says the federal government is still trying to cool its dispute with the United States over aluminum exports, but remains poised to retaliate if necessary.

Francois-Philippe Champagne says he believes the standoff is an opportunity to figure out new ways to bring manufacturing back to life across North America.

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But in the short term, Champagne says, Canada is fully prepared to impose dollar-for-dollar countermeasures against U.S.-made aluminum and products that contain it, beginning Wednesday.

The list of potential targets includes goods such as appliances, drink cans, office furniture, bicycles and golf clubs. The federal government hasn't yet specified what tariffs will apply to which goods.

In a previous spat over U.S. tariffs on Canadian steel and aluminum that lasted nearly a year, Canada put charges on imports of American playing cards, bourbon, sleeping bags and licorice, in addition to metals, to put pressure on lawmakers who represent places where those goods are produced.

The Canadian tariffs brought in more than $1.27 billion, the government reported once they were lifted, by raising the prices Canadian customers paid for the affected products.

The Trump administration imposed the new national-security tariffs last month after complaints from two U.S. smelting operations that Canada was violating the terms of a 2019 agreement between the two countries.

The tariffs were imposed less than two months after the new U.S.-Mexico-Canada Agreement went into effect, putting a chill on a new era of managed North American trade.

"Everyone in Canada understands that aluminum from Canada is no threat to national security in the United States," Champagne said Monday as he prepared for a two-day cabinet retreat with Liberal colleagues at a Global Affairs office building in Ottawa.

"The real opportunity here is to think, 'How can we build more in North America? How can we make ... more in North America and how can we sell to the world?"

Canadian officials are still working to avoid having to impose retaliatory tariffs, he suggested, even as Canada's original Wednesday deadline looms large.

"Obviously, we're going to continue to negotiate. But we're going to be prepared to react as we did last time."

This report by The Canadian Press was first published Sept. 14, 2020.

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