The United States has imposed 50 per cent tariffs on some Canadian goods after Washington and Ottawa failed to reach a new trade agreement, deepening tensions between US President Donald Trump and Canadian Prime Minister Mark Carney.
The tariffs took effect shortly after midnight on Saturday and apply to about $20 billion worth of Canadian goods, including wooden ice hockey sticks. The affected products account for slightly more than five per cent of Canada’s exports to the United States.
The development has raised concerns about the wider economic consequences for businesses and workers in both countries, while potentially complicating negotiations to renew the United States-Mexico-Canada free trade agreement.
Following the collapse of the talks, Carney announced that Canada had suspended trade negotiations with Washington and directed the country’s negotiators to return to Ottawa.
He said Canada would respond to the new American duties with retaliatory tariffs on a dollar-for-dollar basis.
Carney said Canada’s negotiators had worked in good faith to protect the interests of Canadians but argued that last-minute changes to the US proposal were unfair and uneconomic and raised questions about Washington’s reliability as a negotiating partner.
The Canadian prime minister, who was elected last year after campaigning on a promise to stand up to Trump, remains broadly popular in Canada, where opinion polls indicate that most citizens oppose making major concessions to the US president.
The failure to conclude an agreement came despite signs that the two sides were close to a deal only hours before the tariffs took effect.
According to US officials, the proposed agreement would have reduced tariffs on steel, aluminium and vehicles while potentially allowing American alcoholic beverages to return to Canadian liquor stores.
US Trade Representative Jamieson Greer said Canada had declined to finalise the agreement under terms that had been discussed earlier in the week.
Greer described the development as a missed opportunity for Canada to strengthen its economic partnership with the United States, which he described as the fastest-growing economy in the G7.
A senior Trump administration official said the US proposal would have provided Canada with the most favourable tariff position among major exporters to the American market.
The official, however, said Canada had sought additional concessions, particularly regarding steel, aluminium, vehicles and softwood lumber.
With the new duties now in effect, no further trade negotiations have been scheduled.
Trump had last month threatened tariffs on a broader range of Canadian imports, including wine, furniture, dairy products, cement, clothing, fishing equipment and hockey equipment.
The latest measures are directed at Canadian goods that do not qualify for preferential treatment under the United States-Mexico-Canada Agreement.
Trade experts have warned that the tariffs could place additional pressure on already vulnerable Canadian industries, with possible consequences including job losses, reduced investment and business closures.
The latest escalation followed three days of negotiations in Washington between Canada’s minister responsible for trade with the United States, Dominic LeBlanc, and Greer.
The new duties also come on top of existing US tariffs affecting Canadian steel, lumber and vehicles, sectors that have already suffered significant disruption over the past 18 months.
The worsening trade dispute could therefore have broader implications for businesses, consumers and workers on both sides of the US-Canada border as the two governments struggle to restore confidence and reach a mutually acceptable trade arrangement.
