Russia, Canada Say Committed to Countermeasures Against US Tariffs

Russia said on Tuesday it would impose import duties on US road-building machinery, a measure likely to help Russian oligarch Oleg Deripaska, who was hit by US sanctions and controls Russia’s biggest maker of road-building equipment.

In the latest move in the war of sanctions between Russia and the United States, Russia plans to impose import tariffs on certain goods from the United States in response to duties imposed by Washington on steel and aluminum imports, Reuters reported.

The tariffs will target goods that have domestic equivalents in Russia, Economy Minister Maxim Oreshkin said. “There is road-building machinery and a number of other items that Russia imports,” Oreshkin said when asked to specify the list of goods that Moscow plans to levy tariffs on.

The move follows a request from Russian businesses that were hit by US sanctions to the Russian state to help them to overcome increased financial and economic difficulties.

Deripaska, who controls GAZ, Russia’s largest producer of road-building machinery, such as asphalt placers, has already asked the Russian state to purchase some output from his company RUSAL, in an effort to alleviate the pain inflicted by US sanctions.

Oreshkin said that the government had no plans to impose import duties on US-made medicine. That followed a wave of discontent among Russians over the proposal by Russian lawmakers to ban a wide range of US goods and services, from medicine to software.

The new measures will serve a “balancing” function, Oreshkin said, after Washington in March imposed tariffs of 25% on steel and 10% on aluminum, in a move mainly aimed at curbing imports from China.

Russia did not receive an exemption, as Argentina, Australia and Brazil did. Russian steel companies are trying to dispute the tariffs with the US Department of Commerce.

“Russia is using its rights at the World Trade Organization and is introducing balancing measures on imports from the United States,” Oreshkin said.

The list of goods will be set in the next several days, the economy ministry said.

“These measures will begin to be implemented in the form of additional import duties on American goods in the near future,” Oreshkin said. “They will only concern products that have equivalents on the Russian market and will not have a negative effect on macroeconomic indicators,” he said.

Canada Adamant

If US President Donald Trump slaps auto tariffs on cars made in Canada, the government will be prepared to strike back hard.

Foreign Affairs Minister Chrystia Freeland made that assurance to members of the House of Commons trade committee on Tuesday, where she appeared before fellow MPs to answer questions about NAFTA negotiations and the $16.6 billion worth of tariffs against more than 140 American-made products set to go into effect on Canada Day.

The move was a retaliation for Trump imposing significant tariffs on steel and aluminum from Canada last month.

“With respect let me say that the prime minister’s response on May 31 when the Section 232 (steel and aluminum) tariffs were announced was firm, clear and resolute, and it spoke to detailed preparation,” Freeland said in response to a question demanding clarity on what the government is doing to prepare for that threat.

“Our preparations in support of the auto sector are equally detailed and our support will be equally firm and clear, and that’s a commitment.”

US Tariffs on automobiles could put an estimated 160,000 jobs in the auto industry in Canada at risk.

Canada has also launched a challenge under Section 20 of existing NAFTA rules. She also reiterated that NAFTA negotiations continue despite the tariff dispute.

Mexico Worried

US tariffs imposed on several of its main trade partners could spur inflation at home and disrupt the growth of emerging economies, Mexican economist Gabriel Casillas said late Tuesday.

"Geopolitical risks" are nowadays more easily transmitted throughout the global economy, especially where the United States, the world's biggest economy, is concerned, said Casillas, president of the National Economic Studies Committee at the Mexican Institute of Financial Executives, Xinhua reported.

"There has always been conflict in some part of the world, but the channels of transmission through the markets and the macroeconomy were never clear," Casillas told reporters at a press conference.

Things are different now, said Casillas, noting that "the risks are related to a very particular topic and connected to the macroeconomy of the markets: the inflationary pressure in the United States."

New tariffs on imports will lead to higher prices for some goods, and if US inflation rises more than expected, it could lead the Federal Reserve to step up the pace of its interest rate hikes. Since the 1970s, every time the fed raised the interest rates, it sparked a crisis in emerging markets, said Casillas.