US President Donald Trump has made a controversial decision that will affect Canada in some major ways.
If Canadians are hoping to be spared from American tariffs, they may be disappointed.
The White House officially told U.S talk shows that President Donald Trump has made up his mind about tariffs that will apply to everyone and every country for steel and aluminium.
This includes Canada, who is America's #1 supplier.
The problem with this for the U.S government, according to Peter Navarro - the White House trade official - is that excluding one country will create a slippery slope.
“As soon as he starts exempting countries he has to raise tariffs on everybody else. As soon as he exempts one country his phone starts ringing from the heads of state of other countries.” Peter Navarro.
“Canada’s 40% of the (Americanaluminiumm) market. If you exempt Canada, then you have to put big, big tariffs on everybody else. So this is a measured, targeted approach.”
The U.S will be invoking a rarely used clause in the 1962 trade law, allowing President Trump to declare tariffs if required by national security.
“From the perspective of Canada … Canada would say, ‘National security exemption? We fight with you in every war. Our soldiers are right next to your soldiers in every conflict. What possible scenario could you envision where we wouldn’t supply you with steel and aluminium?” CNN’s Jake Tapper asks, imagining how this will look to Canada.
Navarro did say that there is a small hope for Canada to be exempt from this tariff mandate.
He notes that while no countries will be excluded, some industries might be.
Of particular concern to Canada is the auto industry – and how these tariffs would play havoc with cross-border supply chains that use steel and aluminium.
“There’ll be an exemption procedure for particular cases where we need to have exemptions so business can move forward. But at this point in time there would be no country exclusions.”
President Trump has said that the steel tariff will be 25%, and the aluminium tariff 10%.
No additional details like the time frame for the tariffs or the list of countries and particular products the tariff will be applied to have been released.