Business

Tariffs avoided - for now

The Canadian Press -
Mar 8, 2018 / 1:55 pm | Story:
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Photo: The Canadian Press

Canada can breathe easier, for now: It's getting relief from U.S. tariffs for an undetermined period, as one of only two countries receiving a provisional exemption from the steel and aluminum penalties set to clobber the rest of the world.

U.S. President Donald Trump signed proclamations Thursday slapping tariffs of 25 per cent on steel and 10 per cent on aluminum, and they snap into effect for the rest of the world in 15 days.

After months of frantic lobbying, diplomatic arm-twisting, and heated debates within his own administration, Trump made good on his tariff threat at the White House, surrounded by steelworkers.

He held off on threatening America's neighbours.

Trump danced around the question of whether the threat of tariffs will be used to bully Canada and Mexico at the NAFTA bargaining table. He said only that the reprieve remains in place for now, and that NAFTA is important to economic and national security.

''Due to the unique nature of our relationship with Canada and Mexico ... we're gonna hold off the tariff for those two countries,'' Trump said during the ceremony.

''If we don't make the deal on NAFTA, and if we terminate NAFTA ... we'll start all over again. Or we'll just do it a different way. But we'll terminate NAFTA, and that'll be it. But I have a feeling we're gonna make a deal on NAFTA... If we do there won't be any tariffs on Canada, and there won't be any tariffs on Mexico.''

That retains the semblance of a legal fig leaf for the administration.

By law, the tariffs need to be described as a national security matter. A provision in a 1962 U.S. law allows the president to set emergency tariffs as a security issue. But the White House has repeatedly undermined its own legal case, including by intimating that the tariffs would be lorded over Canada and Mexico as some kind of negotiating tool to extract NAFTA concessions.

The White House is now clearly avoiding that kind of talk: ''We will have ongoing discussions with Canada and Mexico,'' a senior White House official said in a pre-announcement briefing. ''NAFTA discussions will be part of that only because NAFTA is an important part of the security relationship within the hemisphere.''

The aide expressed frustration at the way the tariffs have been characterized, referring repeatedly to the ''fake news,'' the lobbyists and the ''swamp things'' that he said exaggerated the ill effects while fighting the measures.