The U.S. imposed 50% tariffs on roughly $20 billion of Canadian goods after trade talks collapsed, and Prime Minister Mark Carney suspended negotiations in response. Canada says it will retaliate "dollar for dollar," increasing tensions with President Donald Trump just as both sides had appeared close to a deal.
The United States imposed 50% tariffs on some Canadian goods early Saturday after the two allies failed to reach a trade agreement, with each side blaming the other for derailing days of talks. The duties took effect just after midnight and cover about $20 billion of Canadian exports, including goods like wooden ice hockey sticks.
That figure represents just over 5% of Canada's exports to the U.S., so the tariffs are not an economic game-changer for America's largest trading partner after Mexico. But they mark an increase in tension between Trump and Carney, and will likely complicate broader talks to renew the U.S.-Mexico-Canada free trade agreement.
Carney suspends negotiations
Carney said he suspended trade negotiations with the U.S. and directed Canada's negotiators to return to Ottawa. He said Canada would retaliate "dollar for dollar" on the new tariffs, adding that the negotiators had worked in good faith but that last-minute changes to the U.S. proposed terms were unfair and uneconomic.
Hours earlier, the two sides had appeared close to an agreement that sources said would have lowered tariffs on steel, aluminum, and autos, and potentially brought American alcohol back to Canadian liquor stores. U.S. Trade Representative Jamieson Greer said at a White House briefing: "Tonight, Canada declined to finalize the trade deal under the terms agreed earlier this week." He called it a missed opportunity for Canada to partner with the U.S.
What Canada wanted
A senior Trump administration official said the U.S. offer would have put Canada in the best tariff position of any major exporter to the U.S., but that Canada sought additional concessions, especially on steel, aluminum, autos, and softwood lumber. No further talks are scheduled as the U.S. implements the new duties, the official said.
Trump had threatened last month to impose duties on a range of Canadian imports, including wine, furniture, dairy products, cement, clothing, fishing rods, and hockey equipment. The new tariffs do not qualify for preferential treatment under the U.S.-Mexico-Canada free trade agreement and could expose already vulnerable sectors to job losses and business closures, trade experts have said.
The decision followed three days of talks in Washington between Canada's minister for trade with the U.S., Dominic LeBlanc, and Greer. These new duties add to existing U.S. tariffs on steel, lumber, and autos, which have taken a hit over the past 18 months, though the strain has largely stayed contained within those sectors.
Source: Investing.com
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