On 31 May 2018, the Government of Canada published a notice of intent to impose countermeasures against the United States in response to the United States imposing tariffs on Canadian steel and aluminum products. According to the notice, Canada intends to impose “surtaxes or similar trade-restrictive countermeasures” against up to CAD 16.6 billion in US originating goods, which represents a dollar-for-dollar retaliation against Canadian exports affected by the US measures. The goods identified in the notice will be subject to either a 10% or 25% surtax or other trade-restrictive measures, and include steel and aluminum products, a significant number of food products, articles of plastic, and paper products, among others.
Canada was exempt from the application of steel and aluminum tariffs imposed by the United States since the imposition of the tariffs on 23 March 2018 pursuant to section 232 of the Trade Expansion Act of 1962. The Canadian exemption was not renewed and expired as of 1 June 2018.
Prime Minister Trudeau, in response to the US action, stated that it is “inconceivable” that Canada could be a national security threat to the United States. Minister Freeland said of the retaliatory measures: “[t]his is the strongest trade action Canada has taken in the post-war era. This is a very strong response, it is a proportionate response, it is perfectly reciprocal.”
The proposed Canadian countermeasures will take effect on 1 July 2018 and will remain in place until the United States eliminates its trade-restrictive measures against Canada. In advance of the implementation date, the Government of Canada is seeking written comments on the proposed countermeasures, which must be submitted by 15 June 2018.
Companies are advised to carefully review the list of products that will be subject to the proposed countermeasures and determine whether any of their products will be impacted. The opportunity to submit written comments may offer a route to seek the removal of certain products from the list. Baker McKenzie trade lawyers are experienced in making submissions in respect of these matters and are available to provide assistance in doing so.
Further information and a full list of the products subject to the proposed countermeasures can be found online here: https://www.fin.gc.ca/activty/consult/cacsap-cmpcaa-eng.asp.