Canada to hit back on metals tariff

US agency says levies pose economic risk

- DAVID LJUNGGREN ANDREA SHALAL JULIA PAYNE

Canada prepared possible reprisals while the European Union reported progress in trade talks on Wednesday as new US metals tariffs triggered more disruption in the global economy and added urgency to negotiations with Washington.

President Donald Trump's doubling of tariffs on steel and aluminium imports kicked in on Wednesday, the same day his administration sought “best offers” from trading partners to avoid other punishing import levies from taking effect in July.

The move will hit the closest US trading partners — Canada and Mexico — especially hard. Canada is the top exporter of both steel and aluminium to the United States.

Prime Minister Mark Carney said Canada is prepared to strike back against the United States if talks with Washington to remove Trump's tariffs did not succeed.

“We are in intensive negotiations with the Americans, and, in parallel, preparing reprisals if those negotiations do not succeed,” Mr Carney told the House of Commons.

Canada’s labour union Unifor called for retaliatory tariffs, while Ontario Premier Doug Ford urged Mr Carney not to “sit back and let President Trump steamroll us.”

Trump has made charging US importers tariffs on goods from foreign countries the central policy of his trade wars, which have severely disrupted global trade flows and roiled financial markets.

The Republican president has long been angered by the massive federal trade deficit, saying it was emblematic of how trading partners “take advantage” of the US. He sees tariffs as a tool to bring more manufacturing, and the jobs that go with that, back to the United States.

However, the non-partisan Congressional Budget Office said on Wednesday that US economic output will fall as a result of Trump's new tariffs on foreign goods that were in place as of May 13.