zerohedge May 31, 2018

And so, the trade wars have begun…

In slightly more than a strongly-worded email  Canadian PM Justin Turdeau exclaimed his indignance at the Trump administration’s decision to impose tariffs on Canadian steel and aluminum imports, saying it is an “affront”:

“Let me be clear, these tariffs are totally unacceptable,”

Trudeau noted that US has a $2billion steel trade surplus with Canada and said it was “inconceivable” that Canada could be seen as a security threat to US.

With that he announced retaliatory tariffs against the US.

Canadian Foreign Affairs Minister Chrystia Freeland announced “dollar-for-dollar tariffs for every dollar levied against Canadians by the U.S.,” starting July 1 that will remain in place as long as U.S. tariffs do.

Canada is set to publish a list of tariffs – one set at 25% and one at 10%

As Goldman explains, the decision to impose tariffs on Canada and Mexico (and now seeing Canada’s response) suggests that prospects for a NAFTA agreement in the near-term are fading. The Administration’s negotiating stance is often unpredictable so there is a risk of over-interpreting any single event. That said, this represents another signal that prospects for a near-term NAFTA deal are fading, just a few weeks after it had appeared fairly likely that a “skinny” agreement involving the auto sector might be reached.

Finally, in his Q&A Trudeau made it clear that “US will harm its own people with such measures.”