US tariffs on Canadian goods take effect as trade talks fail

New US tariffs on some Canadian goods came into effect Saturday after last-minute talks between Washington and Ottawa failed to produce a trade agreement, raising fresh tensions between the two countries.

The 50% duties affect about $20 billion worth of Canadian exports to the United States. 

Canadian Prime Minister Mark Carney said Ottawa would respond with matching tariffs “dollar for dollar” to protect Canadian workers and businesses.

US Trade Representative Jamieson Greer said Canada had declined to finalize a deal that had been discussed earlier in the week. 

He said Washington had offered lower tariffs on several key Canadian exports, including steel, aluminum, automobiles and lumber, in return for concessions from Ottawa.

But Carney said the final changes proposed by the United States were unfair and economically damaging, making it difficult for Canada to accept the agreement.

The breakdown came after several days of intense negotiations. Canadian negotiator Dominic LeBlanc and Greer held talks for about three hours on Thursday and met again for hours on Friday.

The tariffs had originally been scheduled to begin on Wednesday. 

Trump delayed their implementation by three days, saying there had been significant progress toward an agreement.

Earlier Friday, Trump said he believed the two countries should be able to reach a deal, pointing to his “good relationship” with Carney. 

But after the talks continued into the evening, LeBlanc said the two sides still had work to do.
One major source of tension is Canada’s retaliation against US goods. 

Canadian provinces had removed US wine and alcohol from government-run liquor stores, a move that Washington has described as discriminatory.

The White House has also accused Canada of unfair treatment of US alcohol, automobiles and dairy products.

Canada has been seeking relief from US tariffs on steel, aluminum and automobiles, which have hurt Canadian businesses, led to job losses and put further strain on the countries’ long-standing trade relationship.

Carney has warned that Canada’s relationship with the United States has fundamentally changed. 

The US currently accounts for about 70% of Canada’s exports, and his government has said the country needs to reduce that dependence by expanding trade with other markets.

The latest tariff dispute also comes as Washington and Ottawa face another major trade challenge: negotiations over changes to the USMCA, the North American trade agreement. 

Trump declined to renew the pact last month, leaving its future uncertain