Retaliatory Duties On US Exports to Canada and Mexico Are A Step Closer to Becoming Reality

Dear Friends,

Further to the below, the WTO arbitrator issued its report today in the COOL dispute between the US, Canada and Mexico.  In short, the report concludes that the United States’ COOL program harms Canada in the amount of $1.054 billion annually (the $1.054 billion is CAD (not USD).  At today’s exchange rate, that comes to approx. $781 million USD), and harms Mexico in the amount of $227.758 million annually.  See here for more info.

This was the last major hurdle before Canada (and possibly Mexico) imposed retaliatory duties on imports from the United States.  We expect that Canada will proceed to impose such duties soon (i.e., in days or weeks).  The list of products to be subject to such duties, as originally published in 2013, is below.  We also expect that Mexico will identify the products it intends to sanction shortly.  We expect both countries to adopt a “carousel” approach, which means that the list of products subject to these retaliatory duties will change periodically (to exert maximum political pressure on the US).

In that regard, earlier this year, the House of Representatives passed legislation repealing COOL.  That effort stalled in the Senate, however.  It will be interesting to see how the Senate reacts once the sanctions are actually put into place.

If you have any questions about this development, please let us know.

Best regards,

Ted

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