Tariffs are a NAFTA bargaining chip, argues Canadian steel magnate

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The CEO of a North American steel tube and pipe empire says Ottawa should accept the controversial "sunset clause" condition the White House demanded as part of its NAFTA negotiations.

Barry Zekelman, CEO of Zekelman Industries, said thatthe steel and aluminumtariffs announced Thursday are intended as leverage overthe negotiations, whichstalled after high-level talks broke off lastmonth.

Prime Minister Justin Trudeau cancelled a visit to Washington overthe proposal to include a sunsetclause, which he called"completely unacceptable."The condition would mean that the deal would needto be renewedevery five years by a mutual agreement.

This isn't about Canadian steel ... this is solely about theNAFTAnegotiations.- BarryZekelman

"It doesn't mean that after five years this agreement becomes null and void, it means that after five years we sit down and see if it needs a tweak," ZekelmantoldThe Current'sguest hostPiyaChattopadhyay.

U.S. Commerce Secretary Wilbur Ross announced Thursday that Canada, Mexico and the E.U. would be subject to tariffs of 25 per cent on imported steel and 10 per cent on aluminum. Canada responded with dollar-for-dollar tariffs on a variety of goods.

Canada and U.S. slap each other with tariffs

6 years ago

Duration 6:01

Washington says it will hit Canada with tariffs on steel and aluminum. In response, Ottawa is retaliating with a long list of surtaxes on U.S. imports.

"This isn't about Canadian steel ... Canada does not dump steel into the U.S., or aluminum." Zekelmansaid.

"This is solely about the NAFTA negotiations."

A sunset clause would create a lot of instability, according to CBC senior reporter Katie Simpson.

"If every five years all three countries have to re-agree to be in there ... it's going to discourage investors from putting money in both Mexico and Canada," she said.

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Investors will build factories or facilities where they can access the largest markets, she explained.

"Why go build in Canada when you're not quite sure you're going to have duty-free access to that big American market?"

Ken Neumann, the national director of the United Steelworkers of Canada, thinks the U.S. should focus on fighting "the bad actors" countries which dump cheap metal into the North American market instead of imposing tariffs on close trading partners.

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"Every day we have a billion dollars worth of trade that crosses our borders," he said.

"And here is President Trump basically punishing your best neighbour. That's totally disrespectful, it's unconscionable."

Listen to the full conversationnear the top of this page.

With files from CBCNews. This segment was produced by The Current's Julie Crysler and Ines Colabrese.