John Ivison: Hands off the lobster is smart politics

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If crisis management is about preventing a bad situation from getting worse, the federal government deserves full marks for its decision to adjust the list of American goods that will be subject to tariffs.

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Late on Wednesday, Finance Canada announced that it was removing U.S. seafood and fish products from the list of tariffed goods, “based on feedback.”

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That feedback was white-hot anger expressed by Canadian seafood producers, who threatened to go public with their frustration, creating a breach in the united Team Canada front.

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On a Finance Canada call with stakeholders on Tuesday, producers expressed concerns that the government had pledged to impose a 25 per cent tariff on U.S. seafood, including Maine lobster, even though the list of U.S. targets did not include Canadian seafood products.

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The producers were terrified that the Americans would respond with a 50 per cent tariff that would kill the market for the 80 per cent of Canadian aquaculture products that go south.

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From the perspective of exacting maximum political pressure on Donald Trump, the imposition of a tariff on Maine lobster was inspired. The seat of Republican Senator Susan Collins is up for grabs in November’s midterm elections and it is considered a toss-up by most predictive markets.

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A relieved Collins posted on X Thursday that she appreciated Canada’s decision to remove seafood and fish products from its retaliatory tariff list.

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“I urge the U.S. to respond to this show of good faith from our Canadian friends by returning to the negotiating table and working to amicably resolve this trade dispute,” she said.

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A 25 per cent tariff imposed by Canada would likely prove to be highly damaging, given that up to 60 per cent of the state’s lobster catch is sent to Atlantic Canada to be processed. Canada has historically bought around $400 million of Maine’s catch. “Maine lobstermen and the industry as a whole didn’t start this fight. We are just the ones getting hit with the bill,” wrote the MaineWonk, a popular policy commentator based in northern Maine.

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However, the Canadian industry argued that not only would jobs involved with processing and storing the $1 billion of American seafood imports be at risk but the viability of an aquaculture sector that exports $4 billion south would be in question if the Americans retaliated.

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The Canadian Aquaculture Industry Alliance is understood to have written to Finance Canada, giving the government 48 hours to roll back the policy or it would consider going public with its concerns.

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While exerting maximum political pressure was one of the competing objectives considered by the government in drawing up its list of targets, the priority, at least according to Industry Minister Mélanie Joly, is to protect jobs and businesses.

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The latest news from Canada-U.S. Minister Dominic LeBlanc is that talks might resume if the Americans “clarify” their position on sticking points like language and culture policies. That followed a CBC interview with the U.S. Trade Representative Jamieson Greer, in which he said that such issues were not a red line.

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In such an environment, imposing tariffs in sectors that have not been targeted by the White House would be unnecessarily provocative – and potentially costly to Canada.

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The decision to show flexibility in response to Canadian businesses, while being clear that the dollar-for-dollar retaliatory tariffs are immutable until a deal is reached, is smart politics.

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jivison@criffel.ca
Twitter.com/IvisonJ

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