Trudeau government slams U.S., goes dollar-for-dollar with retaliatory tariffs
While steel and aluminum producers will take a major hit as a result of the metals tariffs imposed by the United States, the levies won’t “break” Canada’s overall economy, according to a National Bank economist.
“Taken together, [Canadian exports of steel and aluminum products to the U.S.] represent less than five per cent of Canadian goods exports to the U.S. and less than one per cent of Canadian GDP,” Senior Economist Krishen Rangasamy wrote in a note to clients Thursday, citing data for the 12-month period ending in March.
The Trump administration imposed 10 per cent tariffs on Canadian aluminum and 25 per cent tariffs on steel imports Thursday, erupting a trade war as the Canadian government retaliated with its own $16.6-billion in countermeasures.
Rangasamy noted that with more than 80 per cent of Canadian steel and aluminum exports going south of the border, producers will bear the brunt of the “stunt from the U.S.”, while adding it “will hardly break the Canadian economy.”
Nonetheless, Rangasamy warns the tariffs are concerning.
“They open the door for a broadening of tariffs to include more goods, something that cannot be entirely ruled out as U.S. politicians seek to boost their approval ratings in rust belt states ahead of mid-term elections,” he said.