Canada Hits Back With New Tariffs After Trade Talks With US Collapse

Canadian Prime Minister Mark Carney said Saturday that Canada will impose retaliatory tariffs on US goods after trade negotiations with Washington collapsed, deepening tensions between the longtime allies.

The breakdown in talks on Friday paved the way for new 50% US tariffs on around $20 billion worth of Canadian imports, affecting products ranging from hockey sticks to cement. The duties represent about 5.5% of Canada’s exports to the United States.

Carney said the US had presented Canada with terms that were “uneconomic” and “unfair,” arguing that Washington demanded too much while offering too little.

“We cannot accept what they’ve offered, and we will not give what they’ve asked,” Carney said, accusing the US of waging a trade “war” against Canada.

Canada’s retaliatory tariffs, which will target US steel and dairy products among other goods, are set to take effect on September 8. Carney said further details would be announced next week.

US Trade Representative Jamieson Greer said Washington had offered significant tariff reductions on steel, aluminum, automobiles and lumber in exchange for concessions from Canada. However, in a Fox News interview Saturday, Greer said the US was moving ahead with measures in response to Canadian retaliation and said no new trade talks were currently scheduled.

‘Significant pressure’

Canada has been seeking relief from US tariffs on automobiles, steel and aluminum, which have weighed on its economy, contributed to job losses and strained bilateral relations.

The latest tariffs were initially due to take effect Wednesday, but President Donald Trump delayed them by three days, citing progress in negotiations.

Trade lawyer Ryan Majerus said both countries would face “significant pressure” to find a way out of the escalating dispute. US Senator Amy Klobuchar, whose Minnesota state borders Canada, warned that the trade conflict would increase costs for businesses, farmers and families.

The two countries must also negotiate changes to the US-Mexico-Canada Agreement (USMCA), the North American trade pact that Trump has sought to revise.

Relations have deteriorated further over Trump’s repeated suggestions that Canada could become the 51st US state. Carney has said the relationship between the two countries has been permanently altered and that Canada must reduce its economic dependence on the US.

The United States currently accounts for roughly 70% of Canadian exports.

“We’ve been under no illusions. We recognized from the start that America has changed,” Carney said Saturday, adding that sometimes “its signature was written in pencil.”