Canada reportedly to target U.S. agricultural products in retaliatory tariffs

California wine is promoted at an industry fair in Canada. photo: U.S. Embassy Ottawa

The Canadian government is reportedly considering additional tariffs on U.S. products to step up pressure on the Trump administration over levies on steel and aluminum.  

Canada’s Ambassador to the U.S. David MacNaughton suggested that pork, wine, apples and ethanol could be targeted as soon as next week following a failure to reach an agreement over the steel and aluminum tariffs, according to a report in Politico.

While the Ministry of Foreign Affairs would not confirm MacNaughton’s comments, Minister Chrystia Freeland said that government was looking at ways to increase the impact of retaliatory tariffs.   

The news deflated recent optimism that an end was in sight to Trump administration tariffs on Canadian steel and aluminum, in place since May 2018. Canadian officials have said that the successor to NAFTA, USMCA, could not be adopted until those tariffs end.

Canada responded with reciprocal tariffs on multiple U.S. products including orange juice, whiskey and maple syrup.  

Canada represents the single-largest foreign market for U.S. wine. Imports reached about 74 million liters valued at $448 million in 2018, according to U.S. and Canadian government statistics.

A potential tariff would add to existing alcohol taxes that can add 60 to 70 percent to the price of bottles of wine in Canada, which are sold primarily in government liquor stores.

The Canadian government is also taking steps to shore up the domestic alcohol industry. It introduced legislation to remove restrictions on interprovincial shipping of alcohol.

Tariffs on U.S. pork could affect an industry that exported nearly 200,000 tons of products in 2018, valued at around $1 billion.

Amid talk of more tariffs, the Canadian government has taken steps to shore up its domestic industries. On April 9, the Ministry of Agriculture announced a new program to expand domestic and foreign markets for Canadian pork producers.