Will Canada be exempted from US tariffs on steel, aluminum?

World
Europe

US President Donald Trump wants to impose a 25-percent tariff on steel imports and a 10-percent tariff on aluminum. Canada is the largest supplier of both products to the United States and wants an exemption.

The steel industry directly supports more than 20,000 Canadian workers and another 100,000 workers indirectly. Canadian Hamilton is the epicenter of the industry, accounting for roughly 50 percent of the country's steel production, much of it exported to the United States.

The head of Hamilton's Chamber of Commerce, Keanin Loomis, says roughly 40,000 jobs in the community are at stake if Trump carries out his threat.

"The Canadian steel industry has been very insecure for a while now and this could be that thing that just puts it over the edge and thus may ultimately decimate the industry," Loomis said.

Early in the week, Trump tweeted that Canada and Mexico could get an exemption if they make concessions in the North America Free Trade Agreement (NAFTA) that is currently being renegotiated.

Canadian officials rejected his proposal, saying the threat of tariffs should not be a part of the NAFTA negotiations. Round seven of the talks wrapped up in Mexico City this week.

Jerry Dias, the head of UNIFOR, Canada's largest private sector union, attended the NAFTA meeting and shared his opinion.

"At one hand, we're talking about negotiating a trade agreement. On the other hand, the president of the United States says trade wars are good. And they're easy to win. So, are you there to create a trade war or are you there to come to an agreement on NAFTA? The reality is that he's there for a trade war. So ultimately, he's going to get one with the world," Dias said.

Economists warn a trade war between the two neighbors would hurt both countries.

Canada may be the biggest provider of foreign steel to the US, but it is also the biggest buyer of US steel. Canadian Prime Minister Justin Trudeau has said the tariffs are "absolutely unacceptable" and the country's foreign minister has warned of retaliation.