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Canada Imposes Counter-Tariffs On A Long List Of U.S. Goods

NOEL KING, HOST:

Yesterday, Canada's retaliatory tariffs directed at the United States took effect. The tariffs cover nearly $13 billion of U.S. goods, everything from aluminum and steel to yogurt and whiskey. This move, of course, is payback for President Trump's tariffs on Canadian steel and aluminum. We're going to talk all this through with Christophe Bondy. He has negotiated trade deals on Canada's behalf, and he now practices law with Cooley LLP.

Good morning, Mr. Bondy.

CHRISTOPHE BONDY: Good morning.

KING: So I am looking at this list of things that tariffs have been placed on. Steel and aluminum make complete sense. Yogurt, strawberry jam, sleeping bags, ballpoint pens - this all seems a little random. But is Canada actually sending a political message to the United States with this list of items?

BONDY: The important thing to remember is Canada, in putting forward this list, is acting completely legally within the terms of international trade law, is sending a response to tariffs that were introduced to - by the United States on steel and aluminum. But again, to recall, this list, which affects a number of U.S. products, is proportionate to the steel and aluminium tariffs, and international trade law allows this kind of response. Canada is seeking to - for everyone to play by principled rules, and the rules allow for this kind of response.

KING: Well, Canada had obviously hoped that even the threat of tariffs would cause the United States to back down. That did not happen. Do you - do we have a sense of how this is likely to impact the strawberry jam companies, the ballpoint pen companies here in the United States?

BONDY: Well, Canada is one of the United States' biggest export markets. It's the second-biggest export market for the U.S. after China, and therefore, the fact that these products are going to be more expensive in Canada is likely to have an impact on U.S. producers, just as the U.S. steel and aluminium tariffs are having an impact on Canadian producers. So it's a really unfortunate situation to have these kinds of substantial impacts when the impetus for the initial tariffs was national security, which is kind of surprising between the United States and Canada.

KING: Right, because the two have been allies for many, many years. Now, all of this is happening as these two countries - the U.S. and Canada - try to renegotiate NAFTA. President Trump told the Fox Business Network yesterday that he isn't happy with where NAFTA is; he wants to make it more fair. He also suggested that he would wait until after the midterm elections here in the U.S. What do you think is likely to happen with NAFTA?

BONDY: I think they're going to continue talking about, but it - there is not going to be NAFTA 2.0 anytime soon. Don't forget that the original NAFTA is still enforced. It's still providing enormous benefits to the U.S. economy, to the Canadian and Mexican economies. You know, 14 million U.S. jobs depend upon the NAFTA. For states like North Dakota, something like 80 percent of their agricultural products are exported to Canada and to Mexico. So I think that discussion will go on. The timelines for approvals before Congress mean that the deal can't be done before the end of this year. But these deals take years to negotiate. I worked on the Canada-EU free trade agreement for about six years, and those negotiations took 10 years, all told.

KING: Ten years - wow. In this interview with the Fox Business Network, the president also raised the option or suggested the option of levying tariffs against cars. And I wonder, do you think that this stalemate, if we can call it that, between the United States and Canada is likely to get worse, where we're just slapping tariffs on each other's goods - not at random, of course - but we continue to escalate?

BONDY: Well, I certainly hope that doesn't happen. There was a recent study done by the Peterson Institute for International Economics that said that if tariffs were imposed by the U.S. on automobiles, up to 195,000 U.S. jobs would be at risk. I mean, GM just on Friday said to the U.S. administration, please do not proceed to escalate this to automotives because of the number of U.S. jobs that would be affected. When you think about all these tariffs, what they are is, in effect, a tax on domestic consumers. They are a drag on domestic production. And the U.S. and Canadian and Mexican automotive industries are incredibly interrelated, and so trying to throw a spanner in those works by these tariffs is only going to harm everyone. The same Peterson Institute suggested if there was escalation - and that would include Europe and China - there could be up to 600,000 jobs at risk.

KING: Wow. Christophe Bondy is a former trade negotiator for Canada. He's now with the law firm Cooley LLP. Thank you so much, Mr. Bondy.

BONDY: Thank you. Transcript provided by NPR, Copyright NPR.