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Canadian tariffs to impact Minnesota companies

"He's obsessed by the idea that we're running a trade imbalance with the rest of the world."

MINNEAPOLIS, Minn. -- Canada. America's oldest, yet now annoyed ally.

"Canada has done nothing recently to change the peaceful and mutually beneficial trade pattern that we've had with Canada for a very long time," said Dr. Robert Kudrle, a Freeman Professor of International Trade and Investment Policy at the University of Minnesota's Humphrey School.

So, why then did President Trump all of a sudden slap steel and aluminum tariffs on Canada, causing Canadian Prime Minister Justin Trudeau to hit back with trade taxes on billions of US goods starting July 1st.

"He's obsessed by the idea that we're running a trade imbalance with the rest of the world, he doesn't seem very fussy about the situations that underlie that trade imbalance," said Kudrle.

That situation would hit Minnesota companies hard, with Business Insider estimating nearly $200 million worth from Minnesota to Canada could now be taxed: steel, aluminum, food processing, and agriculture.

"Oh, virtually all of them. I mean, all of our major food processors, all of our natural resource companies, much of our agriculture. I mean, it's very hard to say how it'll all come out," said Dr. Kudrle. "I hope that he figures out a face-saving way of abandoning this idea of attacking our best trade partners and our oldest allies in the name of some kind of cutting down of U.S. imports. It's a very, very bad idea, I think."

Right now, Canada says it won't back down unless the US does. President Trump, though, has said - he needs to protect our "national security" because increased imports have led to the closing of US steel and aluminum plants.

"I think nobody takes seriously the idea that material coming from Canada represents any kind of security threat to the United States," said Dr. Kudrle.

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