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Tariffs take effect
The United States imposed 50% tariffs on $20 billion worth of Canadian products early Saturday, and Canada immediately said it would retaliate after last-ditch negotiations failed to resolve the latest strain between the historic allies.
“went into effect at 12:01 a.m. ET on Saturday”
The new tariffs went into effect at 12:01 a.m. ET on Saturday, targeting dozens of products from hockey sticks to wine, after the U.S. and Canada failed to reach a trade deal.
U.S. Trade Representative Jamieson Greer said, "Tonight, Canada declined to finalize the trade deal under the terms agreed earlier this week," while Canadian Prime Minister Mark Carney said Canada would match the U.S. tariffs "dollar for dollar".
Carney also announced Canada was suspending the trade talks with the U.S., citing what he called "last-minute changes" to U.S. proposed terms that he described as “unfair” and “uneconomic.”
Blame and bargaining
As negotiators raced in Washington, DC to finalize a trade deal before new American tariffs started on Saturday, Al Jazeera reported that the talks were aimed at heading off the 50-percent import taxes threatened against around $20bn worth of Canadian goods.
Vina Nadjibulla, co-founder and CEO of the Centre for Strategic Statecraft, told Al Jazeera that "All indications point to the fact that a deal is imminent" before the expiry of the current extension.
In the U.S. response, Greer framed the breakdown as a failure by Canada to finalize terms, saying the U.S. offer to Canada to receive the best treatment of any major exporter was upended by "new demands and walk backs of other commitments by Canada."
Carney’s office said he spoke by phone with Trump Monday afternoon about the ongoing trade negotiations, and Carney told reporters, "This is not the time to talk about negotiations in public."
Retaliation and pressure
The tariff escalation calls into question the future of a North American trade pact between the United States, Canada and Mexico that is crucial to industry in all three countries, after Canada sought concessions on Trump tariffs on steel, aluminum, autos and lumber that the United States was unwilling to provide.
“"Canada will match those tariffs dollar for dollar to protect our workers and businesses,"”
Carney said Canada would match the U.S. tariffs "dollar for dollar" to protect workers and businesses, while Greer said the U.S. offer was "forward-looking" and included "a historic economic and national security partnership."
The political impact is expected to be bigger than the economic fallout, with the AP reporting that the countries sold each other $880 billion worth of goods and services last year and that nearly 72% of Canada’s goods exports last year went to the United States.
In Canada, Manitoba Premier Wab Kinew urged the country to keep fighting rather than rush to make concessions, calling Trump a “bad person” and “not to be trusted,” and saying, "We’ve got the upper hand; they’re back on their heels right now."