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We're taking strong responsive measures to defend them. She also filed a separate complaint under the North American Free Trade Agreement, arguing the the US tariffs are "completely unacceptable" and "illegal".

For example, Canada imports yoghurt worth just $US3 million from the USA annually, with most of it coming from a plant in Wisconsin, the home state of House Speaker Paul Ryan.

The federal support package includes similar measures to those offered by Ottawa past year in response USA duties on softwood lumber products from Canada.

"We will not escalate and we will not back down", Freeland said Friday.

"I think that prediction has been borne out", she said. "Having said that our approach from day one of the NAFTA negotiations has been to hope for the best but prepare for the worst".

"This is an exaggeration", Mr Mnuchin said.

Several countries, including Canada, are challenging that rationale with complaints against the USA to the World Trade Organisation (WTO).

GM also warned that the tariffs would hurt investment, undermining the USA role in the global industry.

Prime Minister Justin Trudeau responded that Canada would reply to the American measures by imposing levies on $16.6-billion of US imports starting July 1.

Trump says his tariffs are created to protect domestic industries that have been hammered by an unfair global trading system. "We support that", he said.

Most Canadian politicians, including those in Alberta, support the federal government's retaliatory tariffs as a way of standing up for Canadian jobs.

Pulling out of the WTO would isolate the USA from the world economy, said Rufus Yerxa, a former deputy director general at the WTO.

Besides, the danger of surrendering to Trump's bullying is that we would just invite more bullying.

US says India talks a priority after postponing twice
The so-called two-plus-two talks are the highest level of dialogue between the United States and India and were agreed by U.S. President Donald Trump and Indian Prime Minister Narendra Modi previous year .

"We support open and free trade".

The Association of Global Automakers, a Washington-based trade group that represents auto manufacturers and parts suppliers based outside the US, called the potential duties "the greatest threat to the USA automotive industry at this time".

"Congress would not accept that", said Bill Reinsch, senior adviser at the Centre for Strategic and International Studies.

"In all ways we have been very restrained..."

"The president has made it very clear that he thinks that people who are members of a group like North Atlantic Treaty Organisation should pay their fair share", she said on Fox Business.

"The correlation between a decline in vehicle sales in the United States and the negative impact on our workforce here, which, in turn threatens jobs in the supply base and surrounding communities, can not be ignored", GM said in comments submitted for the investigation.

President Trump is looking to add severe tariffs of as much as 25 percent on imported steel and aluminum, which would lead to retaliatory tariffs that could spark a global trade war.

Their statement came in response to Trump's request to the Commerce Department to conduct an investigation and determine whether imports of vehicles are a threat to national security. The latter move is seen as a major threat to Canadian growth and to the North American auto sector, since US carmakers rely heavily on supply chains that include its two neighbors.

Canadian Prime Minister Justin Trudeau speaks on June 9 at the conclusion of the G7 summit in La Malbaie, Quebec.

Earlier this week, representatives of the Canadian auto groups appeared before a House of Commons committee in Ottawa to warn that tariffs would decimate the industry in Canada.

The Canadian government also announced $1.5 billion in subsidies for its steel and aluminum industry.

Freeland said they are also prepared if Trump escalates the trade war.

"That is what we are doing", said Foreign Minister Chrystia Freeland, making the announcement at a steel plant in Hamilton, Ontario flanked by brawny workers in yellow hardhats. "I think all of us, at this point, fully anticipate there will be some moments of drama in the future".