Canada imposes retaliatory tariffs on US after trade talks fail

Canadian Prime Minister Mark Carney has announced plans to impose retaliatory tariffs on the United States after rejecting what he described as a “bad deal” on trade.

The decision came after trade talks between Canada and the US broke down in Washington on Friday, worsening tensions between the two long-time allies.

Following the failed negotiations, new 50 per cent US tariffs on about $20 billion worth of Canadian goods came into effect. The affected products represent about 5.5 per cent of Canada’s exports to the United States.

US President Donald Trump had said Washington “should be able to have a deal with Canada,” citing his “good relationship” with Carney.

But on Saturday, the Canadian prime minister said Trump had set conditions that were ultimately unacceptable.

“We believed earlier this week that we were moving towards a mutually beneficial agreement,” Carney said in the Canadian capital Ottawa.

“In recent days, the United States proposed new terms that were uneconomic, unfair, and undermined the net benefits for Canada, and called into question the reliability of any deal. In short, they asked too much and they offered too little,” he said.

“We cannot accept what they’ve offered, and we will not give what they’ve asked,” Carney said, accusing Trump of launching a trade “war.”

“You’re at war when you get attacked. We got attacked,” Carney said.

New Canadian tariffs will notably target the US steel and dairy industries, and take effect on September 8. Carney said further details would come next week.

On Friday, US Trade Representative Jamieson Greer said Washington had offered “significant tariff reductions on steel, aluminum, autos and lumber” in exchange for concessions from Canada.

A senior US official, who spoke on condition of anonymity, characterized the talks as candid and not acrimonious, but said there were no further scheduled meetings.

– ‘Significant pressure’ –

Canada has been seeking relief from Trump’s tariffs on autos, steel and aluminum, which have battered the country’s economy, forced job losses and strained what was once an iron-clad trade relationship.

Canadian negotiators had been camped out in Washington this week to firm up a deal that aimed to address various flashpoints.

The White House had alleged “discriminatory treatment” by Canada against US alcohol, automobile and dairy products in introducing the duties.

They were originally set to take effect on Wednesday, before Trump issued a last-minute delay of three days, citing major progress in talks.

Ryan Majerus, a former US commerce official who now is a trade lawyer with King & Spalding, told AFP that “both sides will face significant pressure in the coming days to find an off-ramp.”

Beyond the latest tariffs, the United States and Canada still have to agree on revisions to the North American free trade agreement, USMCA, which Trump declined to renew in its current form.

Bilateral ties also have been hurt by Trump’s repeated threats to make Canada the 51st US state.

Trump was irked by Carney’s widely-touted January speech at the World Economic Forum in Davos, Switzerland in which the prime minister declared that the global order was experiencing a “rupture.”

The Canadian leader has repeatedly said that relations with the United States have been forever changed, and that the country must reduce its reliance on the United States, which currently accounts for roughly 70 percent of Canadian exports.

“We’ve been under no illusions. We recognized from the start that America has changed,” Carney told reporters on Saturday.

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