VIDEO: Canadian ag tariffs looming in U.S. steel fight

Canada’s ambassador to U.S. warns agricultural products will be included in latest round of retaliation over steel tariffs


WASHINGTON, D.C. — The window to ratify the United States-Mexico-Canada Agreement before the federal election this fall is quickly closing, but American tariffs on Canadian steel and aluminum imports prevent progress.

Parliament is set to rise June 15 and then will not be able to vote on the USMCA until after the election.

“I don’t think it’s a good idea for us to be going into an election with this hanging over our heads, as you all know discussions during elections are not necessarily focused on good public policy,” David MacNaughton, Canada’s ambassador to the United States, told members of North American Agricultural Journalists during the group’s annual meeting in Washington, D.C.

MacNaughton said Canada is committed to passing the USMCA through Parliament with one simple caveat, that the U.S. drops the tariffs imposed under Section 232 of the Trade Expansion Act on the grounds of national security.

“The tariffs the president indicated were to give the U.S. more leverage in the negotiations presumably accomplished that goal, and (he) has an agreement that he indicates is the best trade agreement ever negotiated,” MacNaughton said.

“The need to have leverage with the 232 tariffs is presumably gone.”

Canada has already imposed retaliatory tariffs that matched the value of the tariffs President Donald Trump’s administration imposed on Canada.

However, the list of products Canada has targeted for retaliatory tariffs will soon be changed because of recent exclusions and modifications of products on the original lists.

“There will be a significant number of agricultural products. I will say simply that we do this more out of sorrow than out of anger,” MacNaughton said.

“We do not want to have to go down that path, but it is, frankly, totally unpalatable for Canada to move ahead with what is allegedly a free trade agreement, when under the guise that Canada is a national security threat, that the U.S. administration has imposed tariffs on steel and aluminum.”

There will be a 45- day consultation period once Canadian officials release the list of possible retaliatory tariffs, which brings the timeline for the new tariffs to take effect into the middle of June.

“I can tell you that if this is unresolved, if the 232 tariffs are still in place, then the discussion about our relationship with the United States of America will be a central part of the campaign, and it won’t be a really positive discussion, I would think,” MacNaughton said.

Dale Moore, executive vice-president of the American Farm Bureau Federation, said if the U.S. is unable to ratify the USMCA, it will affect the willingness of other countries to negotiate free trade agreements.

“Folks, particularly in Japan, and in other countries, have said if you can’t get USMCA done, which is a North American deal with your neighbours, on your continent, why should we sit down and talk to you on any other trade deal,” Moore said during the NAAJ meeting in Washington.

Democratic Congressman Collin Peterson from Minnesota, who is chair of the House agriculture committee, said he want the USMCA ratified as soon as possible.

“The steel tariffs are a big mistake. That industry is not coming back, I don’t care what you do,” Peterson said.

“The whole thing is a fool’s game for agriculture. I don’t see any upside for agriculture.”

Virginia Democrat Abigail Spanberger said Canadian steel and aluminum production does not threaten U.S. national security.

The member of the House of Representatives sits on the agriculture and foreign affairs committees and also spent eight years as a CIA officer with a focus on counterterrorism.

“What I think is a threat to national security is our choice to create challenges with some of our closest allies and partners through the choices that we make in our trade,” she said.

“I have been very vocal in opposing some of the efforts that our administration is taking.”

Republican Senator Pat Roberts from Kansas, chair of the Senate’s agriculture committee, told reporters that Canadian Foreign Affairs Minister Chrystia Freeland has been telling him for some time that her country will not ratify the USMCA with the 232 tariffs in place.

“My concern throughout all of this is that agriculture has been used as a pawn, really, in this effort,” Roberts said.

“We have to work as hard as we can to try to remove these impediments, that would be my suggestion to the administration. We have already said that, so we’ll see what happens.”

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