Canada to take legal action against US for tariffs

Canada will take legal action under the relevant international bodies to challenge the 25% tariffs imposed by the United States on most Canadian goods, a senior government official said on Sunday, calling the tariffs illegal and unjustified.

The comments come a day after Prime Minister Justin Trudeau announced a wide array of retaliatory levies of 25% on U.S. goods in response the tariffs announced on Saturday by President Donald Trump. 

"We will obviously pursue the legal recourse that we believe we have through the agreements that we share with the United States," the official said, briefing reporters in Ottawa on condition of anonymity.

Trump applied a 25% import tariff on all Canadian goods, except energy products such as oil and gas and electricity, which will carry a duty of 10% while entering the United States. The 25% tariff will be in effect starting on Tuesday, while the energy tariff will be implemented starting on Feb. 18.

In response, Canada has imposed tariffs on 1,256 products, or 17% of all the products imported from the United States, starting on Tuesday. The products, including orange juice, peanut butter, wine, beer, motorcycles, cosmetics and more - which will add up to up to C$30 billion.

Some of the big ones are cosmetics and body care of C$3.5 billion, appliances and other household items of C$3.4 billion, pulp and paper products C$3 billion, the official said.

The Canadian government will publish another list in three weeks time that will include products such as passenger vehicles and trucks, including electric vehicles, steel and aluminum products, certain fruits and vegetables, aerospace products, the government said in a statement. The imports have a total value of C$125 billion, it added.

The official said the Canadian government considered the move by Trump illegal and said it violates the trade commitments between the two countries under their free trade agreement and under the World Trade Organization.

"If other legal avenues are available to us, they will be considered as well," the official said. 

The U.S. tariffs and the counter measures taken by Canada will have an effect on the Canadian economy, the official said. The official declined to give specifics on the impact.

Earlier on Sunday, the government said it will provide a mechanism for Canadian businesses to obtain relief from retaliatory tariffs. Under the so-called "remission process," Canadian businesses could apply for tariff relief or refunds, provided they meet certain conditions.

Trump ordered sweeping tariffs on goods from Mexico, Canada and China, demanding that the countries curb the flow of fentanyl - and illegal immigrants in the case of Canada and Mexico - into the United States. Trump's action began a trade war that could hamper global economic growth and reignite inflation.

Mexico and Canada are the top two U.S. trading partners.