The Truth About the “Steel” of a Deal
The Prime Minister and Minister Freeland were patting themselves on the back last week following a Canada-US agreement to lift the 232 steel and aluminum tariffs weighing down on the Canadian import industry. Unfortunately, it’s not exactly the great victory that they’ve claimed. The US had agreed to lift the national security tariffs on aluminum and steel, but only on the condition that Canada and Mexico would accept a quota that would potentially limit our exports. On a more detailed level, the agreement also states that in the event that exports “surge meaningfully” above a historically significant level, the United States could reimpose damaging and job-killing tariffs for both steel and aluminum.
Canada also agreed that in the event of another conflict over trade, we would not retaliate across a broad spectrum of products. This means that we can forget about our strategic tariffs on other US markets such as dairy, auto and pharmaceuticals. Should the U.S. decide to re-instate their tariffs at any time, we would not be able to respond in a way that could bring them back to the bargaining table.
This is a huge problem because we don’t have a product to retaliate with in the aluminum industry. Both of the United States’ aluminum and steel industries tower over ours. While their markets foster growth and prosperity every year, Canada barely breaks even with more and more investment leaving our country and investing in the US (looking at you, General Motors).
Oh, and the tariffs collected by US companies that were supposed to go to support Canadian companies affected by this trade war?
Well, as confirmed by the Parliamentary Budget Officer, the Liberals last year slid over $1 billion into government coffers to be used for pre-elections spending. The PBO further predicts the amount taken as general tax revenue and not used to help Canadian companies will be in the billions of dollars.
The Liberals have used this trade war as a tax grab.
With the US tariffs in place since May 31 of last year, steel manufacturers and engineering and construction companies in Edmonton have experienced a lot of the negative aspects resulting from this international conflict. All in all, in a reckless attempt to discontinue the damage being done to our industries and sway voters before the federal election, Trudeau has caved in to Trump’s demands. All the cards in this situation are now in the hands of President Trump. And the only card we hold is the joker.