Published: Wed, June 06, 2018
Money | By Wilma Wheeler

Expect disagreements over tariffs at G7 summit: Canada official

Expect disagreements over tariffs at G7 summit: Canada official

When Prime Minister Justin Trudeau and President Donald Trump meet at the G7 Summit later this week, it will be the first time they have spoken since the latter slapped steep new tariffs on Canadian steel and aluminum under widely panned "national security" fears.

Trudeau told the premiers he plans to vigorously defend and protect Canadian workers and industry, and that he is committed to successfully renegotiating the North American Free Trade Agreement "that is in the best interests of Canadians". "In the interim, we'll redirect some stuff over to the USA, but in general, we're still going to be making stuff here and shipping it over to the U.S".

Commerce Secretary Wilbur Ross was in Beijing from June 2-3 for the third round of high-level trade negotiations, which focused on China agreeing to buying more US energy and farming goods, according to the White House.

On Friday, he imposed 25 per cent tariffs on steel imports and 10 per cent on aluminium imports from Mexico.

While other World Trade Organization members are also considering retaliating by targeting iconic American products - such as bourbon whiskey and Harley-Davidson motorcycles - the escalating tensions between Mexico and the United States may further complicate the renegotiation of the NAFTA trade accord.

The Mexican tariffs will hit its pork, dairy and potato exports, Minnesota state officials said.

The Diplomat wrote, "with the start date looming for US tariffs on Chinese goods, the latest round of US-China trade discussions - possibly the last before tariffs take effect - ended without a breakthrough".

Last week, Mexico said the retaliatory tariffs would apply to pork legs and shoulders from US suppliers, which account for about 90 percent of the country's $1.07 billion annual imports of the cuts. "We will work aggressively to educate policymakers and others about the facts", said James Davis, executive vice president of Freedom Partners. "They move production to the next", he says. He did not provide further details about his brother's condition.

The United States and Mexico do $600 billion in annual trade and about 16 percent of US goods exports go to its southern neighbor.

Farmers, who are among those most vulnerable to the Mexican tariffs, said the tariffs would devastate US agriculture.

Tim Phillips, the president of Americans for Prosperity, said the tariffs amounted to "self-imposed barriers" to the $1.5 trillion tax overhaul that Trump signed into law in December. If China does ramp up purchases of energy and agricultural goods, they say, it would simply displace those purchases from other nations, making little lasting impact on the overall trade deficit or the American economy. Last week Washington said it was ending a two-month exemption it had granted to imports from Canada, Mexico and the European Union.

Those penalties will remain in place "until the United States government eliminates tariffs imposed", Mexico's government said.

Mexico submits that the tariffs were not adopted in accordance with relevant WTO procedures and also violate the 1994 General Agreement on Tariffs and Trade.

Apparently, the United States president hasn't had time for a briefing on the fate of the world's most important bilateral trade relationship yet.

And shortly after the US tariffs took effect last week, Europe's top trade commissioner said the European Union also will now consider "rebalancing measures". Economy Minister Ildefonso Guajardo said his country would now "surely" look to Europe for pork products, used in many traditional dishes in Mexico.

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