Justin Trudeau: New US Auto Taxes would be “Devastating”

Imposing new taxes on the Canadian auto industry, as US President Donald Trump threatens to do, would have “devastating” consequences in Canada, but also in the United States, where it would result in “a lot of layoffs,” said Tuesday. Canadian Prime Minister Justin Trudeau.

After a year of fruitless negotiations, Ottawa and Washington have been trying for two weeks to agree on a modernized version of the North American Free Trade Agreement (NAFTA), which has been closely linking their economies with Mexico’s since 1994.

“We have been really, really firm about the need to maintain things like … an independent dispute resolution mechanism that protects our cultural exception and many other things like our dairy farmers and supply management.” said Trudeau on a local Winnipeg radio.

“But there are also things that we are flexible about, because it’s time to update this agreement after 25 years,” said Trudeau , without specifying the areas for which he was open to concessions.

Donald Trump has repeatedly warned that if no middle ground was found between Ottawa and Washington, he would not hesitate to unleash a new round of customs taxes, starting with the Canadian auto sector, although the latter is closely integrated with US production.

“If the President were to impose his punitive tariffs on the automobile as he threatened , it would be devastating for the Canadian auto industry, but also for the US auto industry,” said  Trudeau.

“It would cause disruption on a large scale and I think would lead to a lot of layoffs in the United States,” warned the prime minister. “We have to pay attention to what the president is considering,” he said.

Since June, the United States has imposed 25% taxes on Canadian steel and aluminum, officially for “national security” reasons, which  Trudeau has already found “insulting”.

Canada has responded by imposing since the beginning of July taxes of 10 to 25% on dozens of American products ranging from whiskey to orange juice through lawn mowers.

With some C $ 2 billion in daily trade, “the Canada-US trade relationship is arguably the most successful in the world,” Justin Trudeau said a few hours later at a conference in Toronto. press at a plant in Winnipeg.

However, he noted, “Canadians expect their government to stand up for them, defend Canadian workers and Canadian interests” and, in this context, “we prefer not to agree on NAFTA that a bad deal. “