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Canada, China, the EU, Mexico and Turkey have imposed retaliatory tariffs on US$23.4 billion worth of U.S. goods in response to Trump’s tariffs on steel and aluminum.

Photo by Canadian Press/Sean Kilpatrick

The Trump administration has criticized the WTO for encroaching on U.S. legal sovereignty and failing to rein in China’s alleged violation of global trading rules. Trump himself threatened to take action against the WTO earlier this month after the Axios news agency reported that his administration had drafted legislation to withdraw the U.S. from the organization, a move the president repeatedly told advisers he was considering.

The WTO has “not worked well, or not as well as it was intended to work when China was brought into the WTO in the year 2000,” Treasury Undersecretary for International Affairs David Malpass said at an event in Washington on Monday.

Last month, U.S. Commerce Secretary Wilbur Ross said the U.S. tariffs against Canada and other allies were designed to force them into action to address the world’s overproduction and overcapacity of steel.

Freeland has insisted that Canada introduced stronger safeguards on steel well before the U.S. imposed the tariffs.

On this front, Ottawa feels it has more work to do. The federal government has said it’s consulting with industry so even more can be done to address the diversion and dumping of aluminum and steel in the Canadian market.

The unprecedented, cross-border tensions have presented big challenges for the Canada-U.S. trading relationship. The hurdles include the stalled renegotiation of the North American Free Trade Agreement and President Donald Trump’s threats that he will impose new tariffs — this time on the automotive sector.

There are widespread warnings that levies on the highly integrated Canada-U.S. auto sector would be far more damaging for the economy than the duties on steel and aluminum.

The Trump administration is still considering the auto tariffs and, later this week, the U.S. Department of Commerce will hold hearings on whether it can impose them over national security concerns, much like it did for steel and aluminum.

David MacNaughton, Canada’s ambassador to the U.S., is scheduled to testify Thursday at the hearings in Washington.

With files from Canadian Press

Bloomberg.com