tariffs on steel and aluminum for three of America’s biggest trading partners and closest allies — Canada, Mexico and the European Union. After months of negotiations, the Trump administration announced it was unable to come to an agreement with their allies that would allow it to grant a permanent exemption to the tariffs that were announced in March.
Mexico, the EU and Canada immediately declared the US action as unjustified and vowed to retaliate with their own tariffs against American products, including HVAC equipment.
The three allies were among the countries granted exemptions while negotiating with the US. Those negotiations had a June 1 deadline. Trump declared the tariffs were necessary and used national security to justify the tariffs, which only opened the door for other countries to follow suit.
“Today is a bad day for world trade,” EU trade commissioner Cecilia Malmström said in a statement. “We did everything to avoid this outcome.”
Canadian Prime Minister Justin Trudeau said at a press conference that Canada would enact $16 billion in retaliatory tariffs, effective July 1.
“Let me be clear,” Trudeau said. “These tariffs are totally unacceptable.”
Foreign minister Chrystia Freeland called it “the strongest trade action Canada has taken in the post-war era.”
Getting rid of the exemptions for Canada and Mexico will also complicate ongoing negotiations on NAFTA.
Canada ships more than $16-billion worth of the two metals to the United States annually and is the largest exporter of both steel and aluminum to U.S. industries.
The announcement confirms that prices will rise considerably for products in the HVAC industry. Since President Trump announced the tariffs, many HVAC industry suppliers immediately increased their prices 15 to 25 percent, and those costs will be passed onto contractors and, ultimately, consumers. As one industry rep said “Air conditioning systems can range anywhere from $5,000 to $25 – $30,000, so if you add 20% on that, that’s a big number. People in our industry, we are used to seeing a 4 to 6 percent price increase every year on something, but to get something like 30 percent, it just blows your mind when you sit there and start putting in the figures.”