Tariffs row with Canada 'family quarrel'

Susan Cornwell
US economic adviser Larry Kudlow says the stoush with Canada over tariffs is a family quarrel

Trade frictions between the United States and Canada are a "family quarrel", President Donald Trump's economic adviser says, brushing aside concerns expressed by Canadian Prime Minister Justin Trudeau as an overreaction.

The Trump administration said on Thursday it was moving ahead with tariffs on aluminium and steel imports from Canada, Mexico and the European Union, ending a two-month exemption and potentially setting the stage for a trade war with some of America's top allies.

Trudeau responded on Thursday by calling the tariffs an affront to the longstanding security partnership between Canada and the US, and announced retaliatory steps.

Trudeau, in an interview aired on Sunday by NBC's Meet the Press, said it was "insulting" to hear the US claim that Canadian steel and aluminium posed a national security threat.

"I think he's overreacting," White House economic adviser Larry Kudlow said of Trudeau on the Fox News Sunday program.

Kudlow said steel and aluminium tariffs on US allies "may go on for a while" or "they may not" because the matter is subject to negotiation.

Trump has been critical of the North American Free Trade Agreement with Canada and Mexico, saying it has harmed the US economically. The three countries are engaged in renegotiation talks.

Trump said on Friday he might prefer to end NAFTA in favour of separate bilateral agreements with the two US neighbours.

Trudeau is hosting a June 8-9 summit of Group of Seven leaders, including Trump, in the Quebec region of Charlevoix.

Kudlow said Trump had been responding to "several decades of trade abuses" with the tariffs, but noted that the White House announcement said the US still would welcome good faith negotiations.

"And that's why I regard this as more of a family quarrel. This is a trade dispute, if you will. It can be solved if people work together," Kudlow said. "To say that it is an attack on Canada is not right."

In the NBC interview, Trudeau said Canada would be "lodging complaints against these unfair trade practices". Canada said on Thursday it will impose retaliatory tariffs on US exports, and challenge the US tariffs under NAFTA and the World Trade Organisation.

Trudeau said Canada won't be at the table for NAFTA talks if the US insists on a five-year "sunset" clause, adding that "makes no sense".

"You don't sign a trade deal that automatically expires every five years."