Trudeau says U.S. steel, tariffs on national security grounds are insulting

FILE: Prime Minister Justin Trudeau (Photo: CanadianPM/Twitter)

OTTAWA — Prime Minister Justin Trudeau says it is “insulting” that President Donald Trump says Canada’s steel industry poses a national security risk to the United States.

Speaking on NBC’s Sunday morning news show Meet the Press, Trudeau said he wants to make sure Americans, and more specifically Trump supporters, hear the message that they are going to feel financial strain and pain from the steel tariffs Trump imposed on Canada last week.

“The fact that the president has moved forward with these tariffs is not just going to hurt Canadian jobs, it’s going to hurt U.S. jobs as well and neither of those things is something Canada wants to see,” Trudeau said.

Trump imposed 25 per cent import duties on steel and 10 per cent on aluminum in early March, citing national security concerns about the impact those imported products were having on the American domestic industries. He exempted Canada, Mexico and the European Union pending additional talks to ease U.S. concerns.

On Thursday the White House said the exemptions were being lifted because no satisfactory arrangement had been reached.

But, Trudeau said, the idea the Americans would even muse that its closest friend and ally could be a security threat is ridiculous.

“The idea that Canadian steel that’s in military vehicles in the United States, that makes your fighter jets is somehow now a threat … the idea that we are somehow a national security threat to the United States is quite frankly insulting and unacceptable,” Trudeau said.

In the reports from the U.S. Department of Commerce on the steel and aluminum national security investigations, the American concerns have little to do with fears that Canada or Canadian steel directly pose a threat. Instead, they argue, the increase in foreign imports has shut down U.S. steel and aluminum plants, leaving the U.S. industry at risk of becoming unsustainable.

If the U.S. cannot produce enough steel or aluminum to meet basic national defence requirements, the reports suggest, it is a national security threat.

The documents also discuss concerns about the impact on national security from economic threats and unemployment. They cite a 35 per cent drop in steel industry jobs in America over the last 20 years as foreign steel displaced U.S. production and a 58 per cent drop in aluminum production jobs between 2013 and 2016.

Trudeau added that he does not know what Trump wants Canada to do in order to remove the tariffs, because the U.S. actually exports more steel to Canada than Canada sends to the U.S., and when it comes to oversupply from China, Canada is on the same page as Trump.

Canada recently instigated an anti-dumping investigation on Chinese steel, and in March introduced greater powers for Canada customs agents to search for steel products attempting to dodge duties with various measures like incorrect labelling or slight modifications.

Pushing back against the American tariffs, Canada laid out more than $16 billion in retaliatory tariffs, matching the steel and aluminum tariffs and adding in an array of consumer goods from toilet paper to orange juice to playing cards and ball point pens.

Trudeau said the goods Canada picked are those that can be easily sourced from domestic or other international suppliers. However they also target exports from states of significant American political leaders, such as gherkins and yogurt from House Speaker Paul Ryan’s home state of Wisconsin, and bourbon from Senate Leader Mitch McConnell’s state of Kentucky.

Both Ryan and McConnell were publicly critical of Trump’s tariffs in recent days. In addition to the costs to exporters of consumer goods like pickles and chocolate, the steel tariffs will hurt American automakers by pumping up the cost of steel.

The European Union is looking at similar retaliation, going after whisky, jeans and iconic American Harley Davidson motorcycles.

For his part Trump seems nonplussed by Trudeau’s tariffs.

“When you’re almost 800 billion dollars a year down on Trade, you can’t lose a Trade War,” he tweeted Saturday. “The U.S. has been ripped off by other countries for years on Trade, time to get smart.”

White House economic adviser Larry Kudlow told Fox News Sunday that Trudeau was “overreacting” and that the White House is not yet satisfied that Canada has closed trade loopholes on steel and aluminum.

European Union Trade Commissioner Cecelia Malmstrom said Trump’s steel tariffs have nothing to do with national security and called them “pure protectionism.”

One Canadian insider said traditionally, Canada was too small for retaliatory trade action against the U.S. to have an impact, but Trump has gone after so many countries at once that the pushback globally is big enough to have an impact on the American economy.

Next week’s G7 leaders’ summit, which had been expected to be a six-against-Trump event anyway, now has an even bigger storm cloud lingering over it.

Trudeau said the main goal for the meeting was to discuss how trade can ensure inclusion and growth for everyone, but said all the G7 leaders are concerned with Trump’s idea that trade is a war that must have winners and losers. He said he will be having a “frank conversation” with the president about the situation.

“We’re going to be polite but we’re not going to be pushed around,” he said.

Trudeau will start the week off with a series of meetings that are likely to focus on the tariff issue. The Liberals have scheduled a cabinet meeting for Monday morning, after which the prime minister will meet with representatives of the Canadian Steel Producers Association.