Canadians Rally Around Retaliatory Tariffs Aimed At The U.S.

Jun 30, 2018
Originally published on July 1, 2018 1:17 am

Don Woodbridge breaks open a cardboard box and pulls out a big jar of bread-and-butter pickles.

"If you ever find a better bread-and-butter on the market, I'd like to see where," he says.

He says his company, Lakeside Packing, uses a special blend of dill, garlic and mustard oils, and real sugar.

"American products, they use corn syrup and it's not as good," he declares.

Lakeside Packing is a small, family-run pickle and condiment business in Harrow, Ontario — a speck of a town close to the U.S.-Canada border. Woodbridge says his is one of the last pickle-packing companies in the country, doing just over a million Canadian dollars ($761,125) a year in sales.

It's very likely that will pick up, since Canada says it will impose retaliatory tariffs on the U.S. on July 1. On the long list of items to be targeted are gherkins, a popular pickled treat in Canada, and one that Woodbridge produces at his plant.

Woodbridge says he heard about the possibility of retaliatory tariffs on the television news shortly after President Trump imposed tariffs on Canadian steel and aluminum, citing U.S. national security concerns.

"I was sitting in my La-Z-Boy chair and, you know, they were talking about Trump," he says. When the TV reporter said Canada would retaliate by slapping tariffs on U.S. products, "I went down the list, and they said gherkins. I couldn't believe it, you know ... I started laughing."

Woodbridge says he is being flooded with calls from local grocery stores and restaurants, trying to lock in supplies because the cost of U.S. pickled products is due to go up when Canada imposes its nearly $13 billion of retaliatory tariffs on U.S. products.

Food and consumer items — everything from dishwashing liquid and powerboats to yogurt, ketchup and whiskey — will face 10 percent tariffs. A 25 percent tariff will also be placed on any American steel and aluminum.

Darren Green, the president of the Hamilton Steelworkers Area Council in Hamilton, Ontario, was angry when President Trump placed tariffs on Canadian aluminum and steel, and backs Prime Minster Justin Trudeau's decision to go ahead with retaliatory tariffs.

"We've got no choice. We just can't accept that that behavior, the bullying, from somebody that is going to affect our country, our jobs, our families' livelihoods on a whim," he says.

Green says the whole situation is unnecessary and destructive.

"We were producing more steel now than we have, probably, I would say, in the last 20 to 30 years," he says.

Both countries should be celebrating the success of their industries, he says. "But we're not — we're going to tear each other down and we're going to destroy families, we're going to destroy an industry," he says. "It makes no sense."

The Canadian tariffs are designed to hit products like steel and bourbon from states like Ohio and Kentucky that heavily favored Trump in the presidential election. The Canadian government plans to keep them in place until the U.S. removes its tariffs.

The Canadian Steel Producers Association says the U.S. and Canada exported roughly the same amount of steel to each other in 2016. It's part of a tightly integrated cross-border trade network worth about $2 billion every day.

President Trump says Canada has unfair trade policies and a huge trade surplus with the U.S. But the U.S. has a surplus with Canada.

"Official U.S. government statistics show that the U.S. is in a small surplus with Canada," says Gordon Ritchie, who served as Canada's ambassador for trade negotiations in the 1980s. "It's largely balanced trade and so it's fair trade and it's free trade. Or it was, until Mr. Trump started applying bizarre restrictions, tariffs under the guise of national security, which is, of course, ludicrous."

There are concerns that the two neighbors could get embroiled in a trade war. Canada is a small economy and relies on its trade with the U.S. But businesses could start relocating to the U.S. if the standoff becomes protracted.

Ritchie says there will be an impact from both countries' imposition of tariffs but Canada will be just fine.

"It's not going to be the end of the world for Canada. We have quite a strong economy, we have a lot on offer and we have alternative markets for a lot of things," he says.

Canada has been pursuing trade deals with other nations, and is staying well connected with political and business networks in the U.S. Paul Moen, an international trade lawyer at Earnscliffe Strategy Group in Ottawa, says the Canadian government has also promised to step in to help industries like dairy and steel.

"The prime minister and the government have been very diligent about meeting with groups that could be impacted by trade," he says, "reassuring them that in the event that there is a major impact, there will be either trade actions or other types of relief provided."

Roland Paris, a professor of international affairs at the University of Ottawa and a former foreign policy advisor to Trudeau, says no one wins in a trade war that could cost tens of thousands of jobs. Paris says it's a sobering moment in Canada-U.S. relations.

"We make stuff together," he says, "we're the closest two countries in the world. There's no reason why we shouldn't continue to work closely together to grow our own and each other's economies."

So far, Trudeau's move to impose retaliatory tariffs has the backing of the Canadian people. But the economy could be hit hard if Trump ups the ante and makes good on a threat to slap tariffs on automobiles — one of Canada's most important industries.

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SCOTT SIMON, HOST:

Tomorrow, Canada's set to impose nearly $13 billion of tariffs on U.S. goods, everything from U.S. steel and aluminum to dishwashing liquid and powerboats. Those tariffs are in response to the Trump administration slapping steep tariffs on Canadian aluminum and steel a month ago, citing national security concerns. NPR's Jackie Northam reports.

DON WOODBRIDGE: So I'll show you some other products here. OK. This one here is pickled peas. And nobody else has got them on the market, you know? They taste pretty good, you know...

JACKIE NORTHAM, BYLINE: Don Woodbridge is the owner of Lakeside Packing, a small, family-owned operation in Harrow, Ontario, not far from the U.S.-Canada border. He says it's one of the last pickle-picking companies in the country, doing just over a million dollars a year in sales. But it's very likely that'll pick up if Canada goes ahead tomorrow with its threat to impose retaliatory tariffs on the U.S. Among the long list of items to be targeted are gherkins, a popular pickled treat in Canada and one which Woodbridge produces at his plant. He says he heard about it on the TV news shortly after Trump imposed tariffs on Canadian steel and aluminum.

WOODBRIDGE: I was sitting in my La-Z-Boy chair. You know, we're talking about Trump. And then I see we retaliated that night. They went down the list. And they said gherkins. I couldn't believe it, you know? I could see something else. But gherkins - I lifted up my La-Z-Boy chair, and I started laughing, you know?

NORTHAM: Woodbridge said he's been flooded with phone calls from local grocery stores and restaurants because, after July 1, the cost of pickled products and a whole host of other items coming in from the U.S. will cost 10 percent more. A 25 percent tariff will also be placed on any American steel and aluminum. Darren Green is the president of the steelworkers council in Hamilton, Ontario. He backs Prime Minister Justin Trudeau's retaliatory tariffs.

DARREN GREEN: We've got no choice. We just can't accept that behavior, the bullying from somebody that is going to affect our country, our jobs, our families' livelihoods on a whim.

NORTHAM: The Canadian tariffs are designed to hit products from the states that heavily favored Trump in the presidential election. The Canadian government plans to keep them in place until the U.S. removes its tariffs. But Canada is a small economy and relies on its roughly $2 billion of daily trade with the U.S. There are concerns businesses could start relocating to the U.S. if the standoff becomes protracted. Gordon Ritchie, Canada's ambassador for trade negotiations in the 1980s, says there will be an impact, but Canada will be just fine.

GORDON RITCHIE: It's not going to be the end of the world for Canada. We have quite a strong economy. We have a lot on offer. And we have alternative markets for a lot of things.

NORTHAM: Canada has been pursuing trade deals with other nations and is staying well-connected with political and business networks in the U.S. Paul Moen, an international trade lawyer at Earnscliffe Strategy Group in Ottawa, says the government has also promised to step in to help industries.

PAUL MOEN: The prime minister and the government have been very diligent about meeting with groups that could be impacted by trade - so whether it's the steel industry, whether it's the dairy industry - reassuring them that, in the event that there is a major impact, there will be either trade actions or other types of relief provided.

NORTHAM: So far, Prime Minister Trudeau has the backing of the Canadian people. But the economy here could be hit hard if Trump ups the ante and slaps tariffs on automobiles, a critical industry in Canada. Jackie Northam, NPR News, Ottawa. Transcript provided by NPR, Copyright NPR.