UPDATE: Canada slaps tariffs on American steel

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Canadian steel will now cost more in the United States … and vice versa.

Today, Wilbur Ross, the United States Secretary of Commerce, announced the government will impose tariffs of 25 per cent on imported steel and 10 per cent on aluminum. Ross cited national security as the reasoning behind the tariffs.

“We have no objection to competing with any company, any country in any product area, as long as it’s a level playing field,” Ross said during a First on CNBC interview. “But when there are cyber security breaches, when there are forced transfers of technology, where there is stealing of intellectual property, that’s not right. And we will continue to fight very vigorously against such abuses.”

Prime Minster Justin Trudeau said the American tariff announcement, as well as saying Canada is a threat to security, is “an affront” to the relationship between Canada and the U.S., as well as the Canadians who fought alongside Americans “in arms.”

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“We hope common sense will triumph, we see no sign of that in this action today,” Trudeau said. “We will always protect Canadian workers and Canada’s interests.”

The same day, the federal Canadian government announced they would also impose tariffs on US goods, up to $16.6 billion. The dollar figure is equal to the amount of steel Canada sells to the United States.

The government will release two list of products including steel, aluminum and other products that will face tariffs of 10 or 25 per cent.

“We are imposing dollar for dollar tariffs,” said Chrystia Freeland, Minister of Foreign Affairs of Canada. “These counter measures will apply only to American products.”

Freeland added the idea of a national security threat is “absurd,” and in breach of the North American Free Trade Agreement (NAFTA).

“This is not about Canada, this about the United States,” Freeland said. “This is an action the US government has taken, and we believe it is a highly regrettable one.”

President Donald Trump had previously granted exemptions to Canada and Mexico, under the North American Free Trade Agreement (NAFTA). as well as the European Union. However, the steel exemption expires June 1.

Ross said the ban couldn’t only apply to certain countries.

“There’s overproduction of steel and there’s overcapacity throughout the world,” he told First on CNBC. “And so, we have needed to deal with it in a very global manner. You can’t just deal with it dealing with one country.”

He added new American steel facilities could sell their product to US manufacturers, offsetting the price increase.

“US steel has announced its reopening a 1.5-million-ton facility.” Ross said in the interview. “There are dozens of other steel industry and aluminum industry players, all of whom are adding employment and opening facilities as a result.

“So, when you’re thinking about the overall economy, It’s not just the trivial increase in product prices, it’s also the increase in employment and the strength of the economy overall.”

RELATED: AEM isn’t happy about Trump tariffs

The previous steel exemption for Canada had earned applause from AED President and CEO Brian McGuire and AEM President Dennis Slater.

In a joint letter to Trump, they warned of the detrimental impact to United States and Canadian equipment manufacturers from trade uncertainty.

“Your administration’s decision to grant temporary exemption of tariffs on Canadian steel imports is strongly supported by our members. The U.S. and Canada maintain a tightly integrated market for steel,” McGuire and Slater wrote in the letter.

“Canada has competitively-priced steel production and is taking measures to stop the transshipment of lower-priced steel from other countries. We strongly urge you to grant Canada permanent exemption from U.S. steel tariffs to create market certainty, economic growth and avoid economic harm to our industry on both sides of the border.”