US, Canada trade war?

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"We will not escalate, and we will not back down", Foreign Minister Chrystia Freeland was quoted as saying by CNBC, adding the Canadian government was working closely with Mexico and the European Union. Freeland said such tariffs would be "absurd" because the North American auto industry is highly integrated and parts made in Canada often go to cars manufactured in the USA and then sold back to Canadians.

"We have your back", Bains told the gathering, as he detailed federal assistance meant to minimize job losses.

- Spending up to $250 million to "better integrate the Canadian supply chain of steel and aluminum".

Canada hit back at the United States on Friday (June 29) with retaliatory tariffs on American summer-time essentials including Florida orange juice, ketchup and Kentucky bourbon in its opening salvo in a trade war with President Donald Trump.

Still the foreign affairs minister conceded that Ottawa is making contingency plans for any eventuality. -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.

"But tariffs that we impose hurt us, too".

Trump with with Canadian Prime Minister Justin Trudeau during an awkward G7 Summit in early June. Business people warned Canadian lawmakers this week that an escalation into an all-out trade war would be devastating to the Canadian economy, which sends about 75 percent of its exports to the US.

The Canadian Steel Producers Association says the US and Canada exported roughly the same amount of steel to each other in 2016.

While there were calls to impose the retaliatory tariffs immediately, the government opted to hold off until July 1 and hold consultations on the retaliatory measures on an array of US goods.

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Many of the U.S. products were chosen for their political impact, rather than economic.

Aside from reciprocal tariffs on steel and aluminum imports from the USA, the items to be subject to 10 per cent duties come from a wide range of sectors - from ketchup, to lawn mowers, to playing cards. United States officials have linked the tariffs to slow progress in talks to modernise the North American Free Trade Agreement, which Mr Trump says is a disaster and must be changed.

Ujczo doubts Trump will announce auto tariffs because that would be a "red line for the U.S. Congress" before the midterm election.

The trade spat is occurring as the fate of NAFTA remains unclear.

Canada also faces risks from the U.S.

Trump himself has already threatened to put tariffs on the automotive sector, which could prove far worse for the Canadian economy than the steel and aluminum duties. A report from TD Economics estimated such a tariff would cause a recession in Canada and cost tens of thousands of jobs in Ontario's manufacturing heartland.

For companies, Ottawa is promising up to $1.7 billion worth of financing and services for steel and aluminum industries through Business Development Bank of Canada and Export Development Canada.

The European Union is the US' largest export market, accounting for about one-fifth of all United States exports.

"The counter-tariff and community support measures announced today by the federal government is a good first step that will need to be expanded if the trade dispute continues beyond the short-term", Ken Neumann, United Steelworkers national director, said in a statement.