Canada threatens to cancel arms deal with US in tariff dispute

Canadian Prime Minister Justin Trudeau has warned that Ottawa may cancel a major arms deal with the United States following Washington’s imposition of heavy duties on Canadian aircraft exports to the US.

Canada was set to buy 18 new Super Hornet warplanes from the American Boeing Company until the multinational aerospace corporation successfully petitioned US President Donald Trump’s administration to slap hefty tariffs on Canadian Bombardier’s aircraft imports into the US.

Washington argued that the imposition of anti-dumping penalties on the Canadian aerospace company, which is Boeing’s rival, came after the White House found Bombardier guilty of committing trade abuses by receiving state subsidies. The Trump’s administration seeks to slap a 220-percent countervailing duty on Bombardier’s CS100 and CS300 jet airliners sold in the US market.

“I highlighted to the president [Trump] how we disagreed, vehemently, with Commerce’s decision to bring in countervailing and anti-dumping duties against Bombardier,” Trudeau told reporters after concluding talks with the US president on Wednesday.

The Canadian premier further said that attempts made by Boeing against the Bombardier meant that tens of thousands of aerospace workers across Canada would lose their jobs and that Ottawa would not look on those attempts positively. “I certainly mentioned that this was a block to us purchasing any — making any military procurement from Boeing.”

The development comes as there is growing animosity over how to reshape the North American Free Trade Agreement (NAFT). President Trump is set to revamp the 23-year-old pact, which also includes Mexico. He has already cut US trade deficits but has not planned exactly what changes he would like to make.

SS