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Tariffs, deadline, and pause
The United States moved toward imposing 50% tariffs on $20 billion worth of Canadian goods after US and Canada failed to reach a trade deal, with the BBC saying the pause was set to end at 12:01 a.m. Saturday and the ABC News reporting that Trump had paused the taxes for three days less than two hours before they were due to take effect.
“I have paused the 50% Tariffs against Canada, that were scheduled to kick in tomorrow morning for a three day period”
Trump said in a social media post, "I have paused the 50% Tariffs against Canada, that were scheduled to kick in tomorrow morning for a three day period," and the BBC reported that the announcement came less than two hours before the 50% levy on nearly $20bn of Canadian imports was set to go in place.
The ABC News described Trump telling reporters at the White House Wednesday that talks with Canada yielded a “very fair deal for both” sides, while Dominic LeBlanc returned to Ottawa to meet Prime Minister Mark Carney.
But the same ABC News account said key terms remained unclear, noting that Trump said the agreement is all subject to the “finalization of documents,” and that for now the tariffs were postponed until 12:01 a.m. Saturday.
Deal collapses, retaliation begins
After three days of talks in Washington, DC, the United States imposed 50% tariffs on about $20bn worth of Canadian goods early Saturday, and Canada said it would match the U.S. tariffs "dollar for dollar" in retaliation.
The AP reported that the tariffs would hit about 5% of what Canada ships to the United States every year, including products ranging from hockey sticks to tongue depressors, while Al Jazeera said the tariffs would apply to some $20.2bn worth of Canadian exports.
U.S. Trade Representative Jamieson Greer blamed Canada for the breakdown, saying, "Canada declined to finalize the trade deal under the terms agreed earlier this week," and the AP said Carney suspended negotiations and directed Canada’s negotiating team to return to Ottawa.
Carney said in a statement that Canada would match the U.S. tariffs to protect workers and businesses, and the AP added that no further talks had been planned after the breakdown in negotiations.
What’s at stake next
The dispute raised questions about the future of a North American trade pact between the United States, Canada and Mexico, with the AP saying the retaliation escalates the trade conflict and calls into question that future.
“unfair, uneconomic, and called into question the reliability of any deal”
The BBC reported that the new U.S. tariffs were applied on a range of goods including wine, dairy, cement, clothing and hockey equipment, and it said they were in addition to existing tariffs the U.S. had already imposed on Canadian steel and aluminium, autos and lumber.
Carney said the last-minute changes were "unfair, uneconomic, and called into question the reliability of any deal," and the BBC quoted him saying, "as a result, this evening, I have decided to suspend trade negotiations with the U.S. and have directed negotiators to return to Ottawa."
With the negotiations suspended and tariffs already in effect, the BBC said Canada would impose reciprocal tariffs "dollar for dollar," while the AP said the political impact could be bigger than the economic fallout as the countries sold each other $880 billion worth of goods and services last year.