The US has imposed 50% tariffs on some Canadian goods after the two countries failed to reach a trade agreement, with both sides accusing the other of derailing negotiations.
The tariffs took effect shortly after midnight on Saturday on about $20 billion worth of Canadian goods, including wooden ice hockey sticks. The affected products account for just over 5% of Canada’s exports to the US.
The new duties have increased tensions between US President Donald Trump and Canadian Prime Minister Mark Carney and could complicate wider negotiations to renew the US-Mexico-Canada free trade agreement.
Carney said Canada had suspended trade negotiations with Washington and would retaliate “dollar for dollar” against the new tariffs.
“I have decided to suspend trade negotiations with the U.S. and have directed Canada’s negotiators to return to Ottawa,” Carney said in a statement.
“They (negotiators) have worked hard, in good faith, to defend the interests of Canadians throughout these negotiations up until the very last minute,” he said. “However, last-minute changes in the U.S. proposed terms were unfair, uneconomic, and called into question the reliability of any deal.”
Carney was elected last year after promising to stand up to Trump and remains broadly popular in Canada. Polls show most Canadians oppose making concessions to the US president.
Hours before the tariffs took effect, the two sides appeared close to an agreement that sources said would have reduced tariffs on steel, aluminium and vehicles. It could also have allowed American alcohol products to return to Canadian liquor stores.
“Tonight, Canada declined to finalize the trade deal under the terms agreed earlier this week,” U.S. Trade Representative Jamieson Greer said during a White House briefing.
“This is a missed opportunity for Canada to partner with the United States, which is the fastest-growing economy in the G7,” Greer said.
A senior Trump administration official said the US offer would have given Canada the most favourable tariff position among major exporters to the US.
The official said Canada had sought further concessions, particularly on steel, aluminium, vehicles and softwood lumber.
No further talks are scheduled as the US begins implementing the new duties, the official said.
Trump last month threatened tariffs on a wider range of Canadian imports, including wine, furniture, dairy products, cement, clothing, fishing rods and hockey equipment.
The latest tariffs target goods that do not qualify for preferential treatment under the US-Mexico-Canada free trade agreement.
Trade experts have warned that the duties could severely affect already vulnerable sectors, potentially leading to job losses and business closures.
The decision followed three days of talks in Washington between Canada’s minister for trade with the US, Dominic LeBlanc, and Greer.
The new duties add to existing US tariffs on Canadian steel, lumber and vehicles, sectors that have taken a major hit over the past 18 months.
Faridah Abdulkadiri
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