Collapse of trade talks could lead to job losses, but biggest impact on traditional allies is expected to be political
The US has imposed 50% tariffs on some goods from Canada, and the country’s prime minister, Mark Carney, has vowed to match them “dollar for dollar” after the collapse of trade talks.
The tariffs came into force on about $20bn (£14.6bn) of goods – ranging from hockey sticks to tongue depressors – at 04.00 GMT. Trade experts said the tariffs could result in some job losses, but the largest impact is expected to be political, driving a further wedge between the traditional allies.
The trade row is the biggest rupture in recent relations between Washington and one of its closest allies and trading partners as Donald Trump’s bellicose foreign policy angered officials in Ottawa.
The two sides appeared close to a deal on Friday to lower tariffs on steel, aluminium and cars, but the deal was scuttled at the last minute. The two sides blamed each other for the collapse.
Canadian officials had worked hard in good faith but “last-minute changes in the US proposed terms were unfair, uneconomic and called into question the reliability of any deal”, Carney said in a statement.
US officials accused Canada of collapsing the deal by seeking additional concessions at the last minute.
Carney recalled his negotiators as Canada vowed to match Washington’s tough approach. No further talks are planned.
The prime minister said of the 50% tariffs the US was imposing: “Canada will match those tariffs dollar for dollar to protect our workers and businesses.”
The US tariffs will affect about $20bn worth of Canadian products, and the US trade representative, Jamieson Greer, said the breakdown represented a “missed opportunity for Canada”.
“Tonight, Canada declined to finalise the trade deal under the terms agreed earlier this week,” he said in the statement shortly before midnight on Friday. “Despite the US offer to Canada to receive the best treatment of any major exporter to our market, new demands and walk-backs of other commitments by Canada have upended the careful balance reached in the past days.”
Greer said the US offer was forward-looking and included “a historic economic and national security partnership”.
The retaliation escalates the two countries’ trade conflict and calls into question the future of a North American trade pact between the US, Canada and Mexico that is crucial to industry in all three countries.
Trade experts have said the tariffs could subject some already-vulnerable sectors to economic strain, potentially leading to job losses and stores closing.
Trump’s import taxes will apply to about 5% of what Canada ships to the US every year.
