Chrystia Freeland, the Foreign Affairs Minister of Canada, has a preemptive warning for United States policy makers on the issue to cross border trade taxation: any new tariffs by the US on Canadian products or services will be answered with higher tariffs on US products too.
Tax reform debate
Freeland announced the-yet hypothetical- step after she concluded a two day long trip to Washington. The early Canadian warning comes as the US Congress starts a debate on corporate tax reform. The latter comes after a number of efforts which did not proceed as expected in the previous years. A number of administrations and legislatures have failed to solve the tax riddle. The Canadian Minister said that her country does not want to dwell further on the matter, but she used her trip to make her country’s opinions known. Freeland said to US lawmakers that if the final US legislation was inclusive of tariff like penalties, Canada will strike back. She told the assembled media that US’s northern neighbor was strongly opposed to new tariff imposition between the United States and Canada.
Freeland said any kind of export tariffs will cause mutual harm between the two countries- and if any such steps are taken, Canada would respond in an appropriate manner. The actual reality at present is far from this kind of trade scenario. A number of tax ideas are being under discussion by the Congress. The White House itself is sending a number of contradictory signals. Donald J. Trump, the newly minted President of the USA, has suggested that he is not in favor of wider border adjustment when it comes to foreign companies. He is in favor of narrow tariffs on a few imports. The problem is that the same president has made a few favorable comments regarding the adjustment idea.
Ideas under discussion
Freeland believes that the plan has not yet found a solution. The Canadian Minister said that the tariffs and other parts of trade continued to be under discussion. She said that all things are at the preliminary stage and there was no way of knowing the position of the US in such matters. However, the principal takeaway from the trip post two days of hectic meetings were quite encouraging. She informed the media that most lawmakers regard Canada as model trading partner. They felt that Canada has balanced trade with comparable labor standards.