US-Canada Trade Talks Collapse as Washington Imposes New Tariffs
The United States and Canada were unable to finalise a trade agreement late on Friday, The US announced it would impose 50 percent tariffs on certain imports from Canada, marking an escalation of tensions between the two longstanding allies. A senior official from the Trump administration indicated that Section 338 tariffs on approximately $20 billion worth of Canadian goods would be implemented shortly after midnight on Saturday. Canada’s Prime Minister Mark Carney announced the suspension of trade negotiations, stating that the country would respond to the new tariffs with a dollar-for-dollar retaliation.
The decision by the US administration came after three days of discussions in Washington involving Canada’s trade minister, Dominic LeBlanc, and US Trade Representative Jamieson Greer. “I have decided to suspend trade negotiations with the US 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 US proposed terms were unfair, uneconomic, and called into question the reliability of any deal.”
While the new measures impact a relatively minor portion of Canadian exports, they contribute to the pre-existing US tariffs on steel, lumber, and automobiles. The new tariffs could hinder Canada’s delicate economic recovery and influence the manner in which the two neighbouring countries interact in the upcoming months regarding broader negotiations for a free-trade agreement. They apply irrespective of the eligibility of Canadian goods for preferential treatment under the US-Mexico-Canada trade agreement, which has provided protection to a significant portion of Canadian industry from previous US tariffs.
